Australian Trade Commission (AUSTRADE)—Report for 2014-15 (2025)

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Australian Trade Commission (AUSTRADE)—Report for 2014-15

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b Australian Trade Commission Annual Report 2014-15

AUSTRADE AT A GLANCE Who are we?

The Au

stralian Trade Commission (Austrade) contributes to Australia’s economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

âº develop international markets and promote international education

âº win productive foreign direct investment âº strengthen Australia’s tourism industry âº seek consular and passport services.

Our staff

At 30 June 2015, Austrade employed 1,045 staff, 69percent of whom were employed in client-focused operations in Australia and overseas. Staff turnover was 7.2percent and the gender balance was 56percent female and 44percent male.

What we do

Austrade promotes Australian exports and attracts investment into Australia by generating market information and insights, promoting Australian capabilities, making connections through an extensive global network of contacts, leveraging the ‘badge of government’ offshore, providing quality advice and services to exporters and investors, and developing policy. Austrade also has responsibility for policies and programmes to strengthen Australia’s tourism sector.

Our network

At 30 June 2015, Austrade had 79 overseas offices in 47 different markets, and 17of those offices also provided consular services on behalf of the Australian Government. Within Australia, Austrade had 10 offices, complemented by a further 27offices managed through Austrade’s TradeStart network.

Our outcomes

OUTCOME 1 Contribute to Australia’s economic prosperity by promoting Australia’s export and other international economic interests through the provision of information, advice and services to business, associations, institutions and government.

OUTCOME 2 The protection and welfare of Australians abroad through timely and responsive consular and passport services in specific locations overseas.

Performance reporting

Austrade’s success in achieving its outcomes is measured against the deliverables and key performance indicators detailed in the 2014-15 Portfolio Budget Statements for the Foreign Affairs and Trade portfolio. Results are summarised in Part 2 of this report, starting on page 15.

Cover photo: Anzac Bridge, Sydney. The dot graphic represents Austrade’s network.

Section Title. Internal Page Concepts 1 ile. i rt XX / Subt Pa

HIGHLIGHTS 2014-15 Provided value to Australian businesses

Austrade’s Service Improvement Study found its net promoter score is very strong at +33, up from +25 in the previous year, with 80percent of clients saying Austrade made a positive contribution to their business, and 78percent saying they’d achieved a commercial outcome as a result of working with Austrade. See page 41.

Promoted the new North Asia free trade agreements

In partnership with the Department of Foreign Affairs and Trade, Austrade began promoting the benefits of the new NorthAsia free trade agreements, helping Australian businesses to understand how they can fully exploit the opportunities that the new agreements provide. See page 39.

Strengthened Australia’s capacity to attract foreign investment

Austrade appointed five senior investment specialists from the private sector, adding to Australia’s capacity to attract foreign investment. They work in close partnership with Austrade’s domestic and overseas networks, as well as state and territory governments, to win productive foreign direct investment for Australia. See page 65.

Gained new investor visa responsibilities

Austrade was given nomination responsibilities for the Significant Investor Visa and a new Premium Investor Visa, working with the Department of Immigration and Border Protection on the design of the new complying investment framework for both programmes. See page 101.

Opened a new Consulate-General in Houston, United States

In May 2015, Austrade opened an office in Houston, Texas, to attract productive foreign direct investment to Australia, with a particular focus on resources and energy, agribusiness, and advanced services, manufacturing and technologies. The new office also added to Austrade’s consular network. See page 92.

Strengthened Australia’s tourism industry

Austrade helped attract foreign direct investment into tourism infrastructure, including through five major tourism projects, progressing more than $2 billion worth of development that will support 12,000 jobs. Austrade also helped shape the new trial of 10-year visitor visas for Chinese tourists, advanced reforms to working holiday visas, and delivered seven tourism employment plans in key ‘hot spot’ regions experiencing acute labour and skills pressures. See page 68.

Supported Australian businesses through minister-led business missions and events

Austrade delivered results for Australian businesses through minister-led business missions and at business events around the world, including Australia Business Week in India, the largest ever Australian business event to take place in India. See page 84.

Austrade organised 14 minister-led missions this year, involving 517 Australian companies and 650 registered Australian delegates. See page 103.

Provided for the long-term growth of the education and training sector

Austrade initiated a long-term market development plan for the education and training sector, Australian International Education 2025, to ensure the sector’s ongoing growth and maximise its already valuable contribution to Australia’s economy, society and international standing. See page 50.

Provided assistance through the Export Market Development Grants scheme

Austrade continued to administer the Export Market Development Grants scheme, which provides incentives for businesses to enter into export and grow to become sustainable exporters, with nearly 3,200 exporters applying for grants in 2014-15, up 18percent on the previous year. See page 116.

ii Australian Trade Commission Annual Report 2014-15

Letter of transmittal

Office of the Chief Executive Officer

14 September 2015

The Hon Andrew Robb AO MP Minister for Trade and Investment Parliament House Canberra ACT 2600

Dear Minister

It is my pleasure to present to you the annual report of the Australian Trade Commission (Austrade) for the financial year 2014-15.

The report has been prepared pursuant to section63 of the Public Service Act 1999 and in accordance with the Requirements for annual reports for departments, executive agencies and other non-corporate Commonwealth entities, as approved by the Joint Committee of Public Accounts and Audit on 25 June 2015.

The report reflects the matters that Austrade dealt with and the legislation it has administered in pursuing the outcomes of contributing to Australia’s economic prosperity and protecting the welfare of Australians abroad, at 30June2015.

I certify that I am satisfied that Austrade, in accordance with section10 of the Public Governance, Performance and Accountability Rule 2014, has:

âº prepared appropriate fraud risk assessments and a fraud control plan for 2014-15 âº put in place appropriate fraud prevention, detection, investigation and reporting mechanisms that meet the specific needs of Austrade

âº taken all reasonable measures to appropriately deal with fraud relating to Austrade.

In presenting this annual report, I would also like to acknowledge the contributions of my colleagues in Austrade and the professionalism with which they carry out their work.

Yours sincerely

Bruce Gosper Chief Executive Officer

iii Contents

CONTENTS

Australian Trade Commission Annual Report 2014-15

Austrade at a glance inside cover

Highlights from 2014-15 i

Letter of transmittal ii

PART 01 AGENCY OVERVIEW 1

About Austrade 2

Austrade’s network 4

Organisationalstructure 6

Chief Executive Officer’s review 7

Chief Finance Officer’s review 13

PART 02 REPORT ON PERFORMANCE 15

Reporting framework 16

Outcome 1 17

Programme 1.1: Promotion of Australia’s export and other international economic interests 17

Programme 1.2: Programmes to promote Australia’s export and other international economic interests 113

Outcome 2 127

Programme 2.1: Consular and passport services 127

PART 03 MANAGEMENT AND ACCOUNTABILITY 133 Corporate governance 134

Corporate planning 139

Risk management 141

Legislative framework and external scrutiny 143

Management of human resources 145

Financial management and business assurance 161

Managing knowledge and information 165

PART 04 FINANCIAL STATEMENTS 169

Independent auditor’s report 170

Certification of financial statements 172

Notes to and forming part of the financial statements 183

PART 05 APPENDIXES 243

A Austrade and TradeStart locations in Australia, and TradeStart partners 244

B Austrade’s Service Charter 246

C Work health and safety 248

D Financial and staffing resources 250

E Ecologically sustainable development and environmental performance 253

F Advertising and market research 256

G List of requirements 262

List of figures and tables 267

Abbreviations and acronyms 269

Index 270

Auditors and other information 280

Austrade locations 281

iv Australian Trade Commission Annual Report 2014-15

A brief history of Austrade 1 2 3 4

5 6 7 8

9 10 11 12 1985-86

Austrade was established by the Australian Trade Commission Act 1985, and several export assistance agencies, including the Export Market Development Grants board, were consolidated into one organisation.

Austrade also provided consular services in certain locations overseas. Operations commenced on 6 January 1986 and Austrade was located in the Industry portfolio.

Austrade moved from the Industry portfolio to the Foreign Affairs and Trade portfolio. Its head office also moved from Canberra to Sydney.

1991

Austrade was again restructured, with its 10 executive general managers reduced to seven.

1996

An agreement was negotiated between federal, state and territory governments to cooperate in doubling the number of Australian companies exporting.

2001-02

Austrade was given responsibility for the promotion and attraction of productive foreign direct investment into Australia.

2008

Austrade was given responsibility for the international promotion of Australia’s education and training sector.

2010

Austrade was given responsibility for tourism policy, programmes and research.

2013

1990 Austrade’s board commissioned McKinsey & Company to review the span of the agency’s activity and the way it was organised in Australia and overseas. As a result, Austrade was restructured to include a group of 10executive general managers, with six of those positions each directing an overseas region.

1992 Austrade established its National Export Hotline— 13 28 78.

1997-98 The Business Club Australia programme was launched. Eight TradeStart offices were also opened, extending Austrade’s export advisory services to regional Australia. The network has since been expanded and now includes 27 TradeStart offices located around Australia.

2006 From 1 July 2006, Austrade operated under the Financial Management and Accountability Act 1997 and its board of directors was replaced with an executive management structure. Prior to 1 July2006, Austrade operated under the Commonwealth Authorities and Companies Act 1997.

2011 A comprehensive review of Austrade resulted in a realignment of its network, with trade resources focused on Asian and growth and emerging markets that provide the greatest opportunities for Australian businesses. Austrade’s investment resources were focused on more mature, capital-rich markets.

2014 Austrade was given nomination responsibilities for the Significant Investor Visa and a new Premium Investor Visa, with a new complying investment framework for both coming into effect from 1 July 2015.

Part XX / Subtile. Section Title. Internal Page Concepts 1 1

AGENCY OVERVIEW

T R PA 01

About Austrade 2

Austrade’s network 4

Organisationalstructure 6

Chief Executive Officer’s review 7

Chief Finance Officer’s review 13

2 Australian Trade Commission Annual Report 2014-15

About Austrade

The Australian Trade Commission—Austrade— contributes to Australia’s economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they develop international markets and promote international education; win productive foreign direct investment; strengthen Australia’s tourism industry; and seek consular and passport services in certain locations overseas.

Austrade achieves this by generating market information and insight, promoting Australian capabilities, developing policy, making connections through an extensive global network of contacts, leveraging the ‘badge of government’ offshore and providing quality advice and services.

Austrade operates in a way that represents a good investment for the taxpayer and meets or exceeds all appropriate standards of ethical behaviour.

Austrade’s functions Promoting Australian trade internationally— Austrade helps Australian companies to grow their business in international markets, including through the administration of the Export Market Development Grants (EMDG) scheme and the TradeStart network.

Promoting Australian education internationally—Austrade promotes the Australian education and training sector in international markets and works with institutions and industry stakeholders to grow demand for Australian education and training.

Attracting foreign direct investment to Australia—Austrade provides coordinated government assistance at a national level to promote, attract and facilitate productive foreign direct investment into Australia.

Strengthening Australia’s tourism industry— Austrade develops policy, manages programmes and provides research to support Australia’s tourism industry and to grow Australia’s tourism market share.

Working across government—Austrade delivers advice to the Australian Government on its trade, tourism, international education and training, and investment policy agendas.

Promoting Australia through online channels, media and marketing—Austrade’s objectives are supported by its marketing activities, including management of the nation branding programme, Brand Australia, administration of Austrade’s websites and business communications, as well as related market research and major events.

Delivering consular services—Austrade provides Australian consular, passport and other government services in designated overseas locations in support of the Department of Foreign Affairs and Trade’s consular network.

Austrade’s network

At 30 June 2015, Austrade had 79 overseas offices in 47 different markets, and 17 of those offices also provided consular services on behalf of the Australian Government. Within Australia, Austrade had 10 offices, complemented by a further 27 offices managed through Austrade’s TradeStart network. Austrade’s Australian and overseas locations are shown in Figure1.

Austrade’s international network works with its onshore network to contribute to Australia’s economic prosperity through its trade promotion and investment attraction activities, promotion of Australia as an international study destination, and connecting tourism attraction and policy work across its wider spectrum of work.

Legislation

Austrade was established by the Australian Trade Commission Act 1985. It is a non-corporate Commonwealth entity under the Public Governance, Performance and Accountability Act 2013, and a statutory agency under the Public Service Act 1999. Austrade is part of the Foreign Affairs and Trade portfolio.

Ministerial responsibility

Austrade, through its CEO, reports to the Minister for Trade and Investment. The Hon Andrew RobbAOMP held the position of Minister for Trade and Investment for the duration of the reporting period.

In December 2014, the Prime Minister announced the appointment of the Hon Steven CioboMP to the position of Parliamentary Secretary to the Minister for Trade and Investment. He was sworn into the position on 23December 2014. MrCiobo also holds the position of Parliamentary Secretary to the Minister for Foreign Affairs.

Staffing

Austrade has a highly skilled, educated and multilingual workforce with a mix of private and public sector experience, from diverse cultural backgrounds. At 30June 2015, Austrade employed 1,045staff, 69per cent of whom were employed in client-focused operations in Australia and overseas.

In 2014-15, staff turnover was 7.2per cent, compared with 13.5per cent in 2013-14. The gender balance was 56percent female and 44percent male. Further staffing information is provided in Part3 of this report (see page145).

Financial report

In 2014-15, Austrade continued to maintain an effective financial management framework and achieved improvements in practices and processes. Further analysis of Austrade’s financial poition is provided in the Chief Finance Officer’s review on page 13, and the financial statements in Part 4 of this report.

Austrade’s Service Improvement Study

Each year, Austrade undertakes its comprehensive Service Improvement Study to assess its service delivery and identify areas for improvement in its services to Australian organisations. The study is conducted independently and results are delivered quarterly.

In 2014-15, the Service Improvement Study found that 89percent of Austrade’s clients were satisfied with their dealings with the agency during the past 12 months. This result reflects the strong client service culture that exists within Austrade. For more information, see page 41.

Part 01 / Agency overview. About Austrade

4 Australian Trade Commission Annual Report 2014-15

Austrade’s network

Figure 1: Austrade’s Australian and overseas locations at 30 June 2015

Istanbul

Johannesburg

Accra

Nairobi

Madrid

Jeddah

Riyadh

Kunming

Hong Kong Shenzhen

Vladivostok

Port Moresby

Bandar Seri Begawan

Singapore

Jakarta

Kuala Lumpur

Bangkok

Manila

Ho Chi Minh City

Hanoi Yangon Mumbai

Chennai

Colombo

Bangalore Kochi

Hyderabad

Islamabad

New Delhi

Lahore

Karachi

Chandigarh

Dhaka

Kolkata

Ahmedabad Jaipur

Seoul

Osaka Tokyo

Fukuoka

Sapporo

Beijing Qingdao Nanjing

Wuhan

Dubai

Abu Dhabi

Tel Aviv

Milan Paris

London Frankfurt Prague

Moscow

Warsaw

Stockholm

Darwin

Newcastle Sydney

Brisbane

Wollongong

Canberra

Melbourne

Perth

Hobart

Adelaide

Port Louis

Taipei

Chengdu Guangzhou

Ulaanbaatar Shenyang

Shanghai Kuwait

stle

Australian Government mission managed by the Department of Foreign Affairs and Trade (DFAT), and where Austrade also has an office

Consulate or office where Austrade manages the official Australian Government presen ce

Austrade office in Australia

5 Part 01 / Agency overview. Austrade’s network

Auckland

Suva

Lima

Sao Paulo

Buenos Aires

Santiago

Bogota

Mexico City

San Francisco

Vancouver

Washington DC New York

Toronto

Chicago

Houston

tle

Notes: A DFAT regional consular officer is based in Dubai. A D FAT policy officer is based in Houston. TradeStart locations are detailed in Appendix A.

6 Australian Trade Commission Annual Report 2014-15

Organisationalstructure

Figure 2: Austrade’s organisational structure at 30 June 2015

Head of Strategy, Policy Coordination, Governance and Media

Lynne Ashpole

Chief Economist

Mark Thirlwell

Executive Director Tourism, Investment, Education and Programmes Group

Tim Beresford

Chief Operating Officer Corporate Services Group

Marcia Kimball

Executive Director International Operations Group

Grame Barty (acting)

Established Markets

Europe

Israel

Japan

Korea

Mongolia

New Zealand and Pacific

North America

Turkey

Growth

and Emerging

Markets

Africa

Latin America

Middle East

Russia

South Asia

East Asian Growth Markets

International Issues

ASEAN

China

Hong Kong

Taiwan

Chief Executive Officer

Bruce Gosper

Trade

Marketing, Online and Business Practice

Tourism

Investment

Government, Ministerial and International Education

Export Market Development Grants

Human Resources

Security, Consular and Property

Legal,

Procurement and Fraud

Finance

IT Services

Note: Austrade’s management committees and subcommittees are detailed on page 138.

7 Part 01 / Agency overview. Chief Executive Officer’s review

Chief Executive Officer’s review

Bruce Gosper, Chief Executive Officer, Austrade.

Year in review Austrade has achieved a great deal in the past year. We’ve taken on some new responsibilities, and our clients continue to value our services highly. We’ve started to promote the opportunities arising from the three new North Asia free trade agreements and we’ve expanded our work promoting Australia as a destination for productive foreign direct investment. Tourism maintains its place as one of Australia’s strongest export sectors, and Austrade has continued its work to strengthen the sector through policy, programmes and research. International student numbers continue to grow, and we’ve taken steps to ensure this trend continues. Austrade has also continued to provide consular services to Australians in 17 locations overseas.

Australian organisations valued Austrade’s services

Austrade’s Service Improvement Study for 2014-15 showed we are providing client services that make an impact, and that satisfaction with Austrade is high. The study found that 89percent of Austrade’s clients were satisfied with their dealings with us during the past 12months, with Austrade’s net promoter score very strong at +33, up from +25 in the previous year. Eightypercent of our clients said Austrade made a positive contribution to their business,

and 78percent said they had achieved a commercial outcome as a result of working with us. I’m pleased with these results, which reflect the strong, commercially focused, client-service culture that exists within Austrade.

We led a national strategy to attract foreign direct investment...

Austrade leads a national, whole-of-government strategy to promote and facilitate foreign investment into Australia, focusing on investment that delivers the greatest value to the Australian economy and contributes to economic prosperity. The five agreed national priorities that Austrade focuses on are agribusiness and food, resources and energy, major infrastructure, tourism infrastructure and advanced manufacturing, services and technology.

... with greater support through new senior investment specialists

During the year, Austrade recruited five new senior investment specialists from the private sector, adding to our capacity to attract foreign direct investment. The senior investment specialists, who each bring deal-making and facilitation experience as well as deep expertise in their respective sectors, work with investors and local jurisdictions to attract foreign direct investment into the national priority sectors.

… and through a new office extending our reach overseas

In March 2015, Austrade opened a new office in Houston, Texas. Houston is regarded as the global energy capital of the world, and provides an ideal location to focus on attracting investment into the resources and energy sector, as well as in agribusiness and advanced services, manufacturing and technologies.

8 Australian Trade Commission Annual Report 2014-15

Austrade assumed new investor visa responsibilities...

In 2014-15, Austrade was given new investment-related responsibilities, with the Minister for Trade and Investment asking us to design a new Premium Investor Visa programme and develop a new complying investment framework for that programme and for the Significant Investor Visa programme. These changes were part of a suite of government initiatives to promote investment, innovation and commercialisation of Australian ideas, research and development.

… and we contributed to the Minister’s inaugural Investment Statement to Parliament

We also provided significant input into the Minister for Trade and Investment’s inaugural annual Investment Statement, delivered to Parliament on 23 September 2014. The statement highlighted the priority the government has placed on attracting foreign direct investment to support Australia’s continued economic growth.

We worked to strengthen the tourism sector

As well as working to attract foreign direct investment into critical tourism infrastructure, Austrade helped strengthen the tourism sector in other ways by developing policy, managing programmes and providing research to grow Australia’s tourism market share. We worked to give the tourism sector a more effective voice in policy development and to improve policy settings in immigration, transport, employment and the business environment to enable the sector to prosper and grow. We also worked with state and territory governments, tourism organisations and the tourism industry to implement the Tourism 2020 strategy, which

provides a framework for growth to help tourism businesses remain competitive in a dynamic global environment.

We helped to develop the White Paper on Developing Northern Australia

In June 2015, the Government released its White Paper on Developing Northern Australia: Our North, Our Future. It included several important tourism and investment attraction measures that are expected to bring significant benefits to the Australian economy. Austrade contributed to the policy development process, providing advice and insights from our international network and tourism policy team to the Department of the Prime Minister and Cabinet and the Department of Immigration and Border Protection.

We helped shape measures to assist the tourism sector, including the trial of 10-year visas for Chinese tourists, visa applications in Chinese, and improvements to online visa application services, which will help to give Australia an edge in attracting visitors. Reforms to the working holiday visa, which will increase the time visa holders can work with the same employer in Northern Australia, were also announced, as were changes that will allow access for some visa holders to a second-year visa to work in ‘in-demand’ industries in Northern Australia, such as tourism and hospitality.

Austrade delivered major business missions

and events

This year, Austrade delivered results for Australian businesses through major business missions and events in Australia and overseas, and we helped spread the word about Australian capability among our major trading partners.

Australia Business Week in India in January

2015 was a major undertaking, pulling together a programme of 125 events for 450 businesspeople across 14 sectors in eight Indian cities. Feedback from delegates and government officials, in Australia and India, was overwhelmingly positive and our follow-up has revealed that 90percent of participants expect commercial outcomes in India in the next year.

We also delivered a substantial programme of other ministerial business missions to the Middle East, Asia, Canada, New Zealand and Latin America, to name a few. More than 1,000 companies have been represented on business missions since early 2014, with more to come in 2015-16.

The Match Australia programme, administered by Austrade, connected Australian businesses with global partners through major sporting events, including the Cricket World Cup and the AFC Asian Cup. Match Australia is an important tool to help promote Australia as a destination for foreign direct investment and is used to connect Australian exporters with overseas customers, delivering trade, investment and education opportunities.

We helped businesses understand the benefits of new free trade agreements

2014-15 was a landmark year for Australian trade policy, with Australia signing free trade agreements with three of Asia’s strongest economies—Japan, Korea and China. There have already been some tangible results for Australian exporters (see pages 87 and 93). Working with the Department of Foreign Affairs and Trade, Austrade is promoting the benefits of those agreements to the Australian community and to businesses in Australia and overseas, and is helping Australian businesses understand how

they can fully exploit the opportunities these new agreements present.

We assisted exporters through the Export Market Development Grants scheme

Nearly 3,200 exporters applied for grants under the Export Market Development Grants (EMDG) scheme in 2014-15, 18percent more than the previous year. Those exporters represented $3.8 billion of export sales and claimed reimbursement of $165 million in international promotional costs. With 2015-16 marking 40 years since the first EMDG claims were made in 1975, the scheme has supported thousands of Australian small and medium-sized enterprises to enter new markets and grow their exports.

The EMDG team met a challenging workload in the last 12 months and worked hard to improve the scheme’s administration, publishing online guides on the grants and claim processes, and streamlining application processes. Austrade also supported the legislated review of the EMDG scheme, undertaken by Michael Lee.

We worked towards a sustainable international education sector for Australia

In 2014-15, Austrade initiated Australian International Education 2025, a long-term market development plan for the education and training sector, and embarked on a comprehensive programme of consultation. The plan will help sustainably increase the supply of education and training services to international students coming to study in Australia and significantly increase offshore delivery of education and training services.

Part 01 / Agency overview. Chief Executive Officer’s review

10 Australian Trade Commission Annual Report 2014-15

Austrade also continued to promote Australian education internationally through the Future Unlimited brand and the Study in Australia website, and subscribers to our Market Information Package also increased.

Austrade contributed to the second Australia’s International Business Survey

Austrade worked with Efic, the Export Council of Australia and the University of Sydney on Australia’s International Business Survey 2015, the follow-up to last year’s first report. The survey provided new insights into the market development activities of exporters, with respondents saying that visiting overseas customers in person was their most important activity. Other important activities included attending overseas trade shows, using digital channels, online search marketing and advertising, social media and selling via third-party e-commerce websites. The results confirmed that Austrade’s services to exporters are valid and valuable and help Australian businesses succeed internationally.

We provided consular services overseas

Austrade provided high-quality and responsive consular support to 891 Australians overseas during 2014-15, including assistance to 180people arrested or imprisoned overseas, 120 people requiring medical assistance or hospitalisation, and support to the families of 83people who died overseas. Our consular staff processed 13,486 new passport applications and undertook 12,558 notarial acts.

We continued to develop our staff

The results from the most recent APS employee census show that Austrade employees and managers are professional, engaged and

respectful, and value working in an organisation that contributes to the economic wellbeing of Australia. In this work, the qualities that shine through are a can-do attitude and strong culture of collaboration and teamwork. We continued to develop our staff and support a diverse workforce through a range of initiatives, including the Trade Commissioner Development Programme, short-term overseas assignments, scholarships, programmes to build cross-cultural awareness and language capabilities, as well as inclusive leadership, women’s mentoring, disability employment, and Indigenous programmes.

Outlook for 2015-16 We already know that next year will be a big year. Recognising the value that Austrade’s commercial acumen, its knowledge of and extensive contacts in international markets, and its status as a government organisation can bring to Australian businesses, Austrade received new funding in the 2015-16 Budget. This included new resources to expand Austrade’s investment facilitation work, to promote the new free trade agreements, and to ramp up the successful programme of major business events and minister-led business missions.

A stronger focus on promoting Australia as a foreign investment destination

Attracting foreign direct investment into Australia is a key part of the Government’s push to lift Australia’s productivity and prosperity. With new budget funding next financial year, we will significantly expand our capacity to attract and facilitate foreign investment in each of the Government’s five priority areas, with new resources within Australia and in our international network.

As part of this work, we will attract and facilitate investment into Northern Australia, and organise the Northern Australia Investment Forum in Darwin in November 2015. The forum will help build the business-to-business and business-to-government links essential to winning new foreign investment and boosting reinvestment in Northern Australia. At the same time, we will seek other opportunities to support the North’s development, including through working with the Department of Industry and Science on a grants programme to help attract more foreign investment to commercialise tropical medicine research.

From 1 July 2015, we will also gain responsibility for nominating potential applicants for the Significant Investor Visa, along with the state and territory governments, and we will also become the sole nominator for the new Premium Investor Visa programme.

Strengthening Australia’s tourism sector

With tourism a high-value export sector for Australia, Austrade will continue advocating across government, working to reduce barriers to growth, developing policies and programmes to strengthen the sector, and making sure it can exploit opportunities through business missions and Australia Week events.

Simple visa settings that encourage visitors without compromising the integrity of Australia’s borders are critical to the success of the Australian tourism industry. Austrade will build on the positive tourism outcomes in the White Paper on Developing Northern Australia, working with our colleagues in the Department of Immigration and Border Protection to implement key visitor visa and working holiday reforms, particularly the 10-year validity visitor visa for Chinese tourists.

Tourism employs nearly a million Australians directly and indirectly but, as the industry continues to grow, vacancies and skills gaps are significant. We will work with colleagues across the Australian Government and state and territory agencies to improve the skills of the tourism and hospitality workforce, and effectively promote the value of a career in the industry.

Austrade will also work with key industry partners and investors to attract significant investment in tourism accommodation and experiences. Facilitating this investment is equally important—Austrade will help major tourism project investors navigate various Australian and state and territory government approval processes and assist them with access to relevant government programmes.

Continuing free trade agreement promotion and outreach

To help the community and Australian businesses understand the benefits of new North Asia free trade agreements, Austrade will expand the free trade agreement (FTA) awareness programme, delivered in partnership with the Department of Foreign Affairs and Trade. This work includes seminars delivered by Austrade to provide practical advice to businesses around Australia, helping them to access the opportunities the new FTAs bring, along with grants and information kits for business organisations to help them extend this message even further. An advertising campaign will help inform the community and businesses about the new FTAs.

Expanding the Australia Week business events to more overseas markets...

The Government has asked Austrade to deliver an expanded series of Australia Week trade missions and promotional events, to be

Part 01 / Agency overview. Chief Executive Officer’s review

12 Australian Trade Commission Annual Report 2014-15

organised biannually in China and India, with an Australia Week in China to be held next year. There will also be a coordinated Australia Week programme across ASEAN, with the first to be held in Indonesia in November 2015, and a similar event in the United States in February 2016. Along with other minister-led business missions in international markets, which Austrade will continue to coordinate, these events will use the badge of government to create opportunities for Australian businesses, and will continue to broaden engagement and business contacts in markets crucial to Australia’s economic prosperity.

…and strengthening our overseas network

Switzerland is a significant investment market for Australia, and Austrade is set to expand our network into the Swiss market in 2015-16, opening a new office in Zurich to work across the investment priority sectors. Austrade will also open a new office in Boston, United States, which will focus on investment attraction, including for advanced manufacturing.

Capturing opportunities for Australian businesses…

Austrade will continue to identify and promote high-value export opportunities for Australian businesses and institutions, including those arising from the North Asia free trade agreements. We will continue to help Australian exporters understand and access new paths to international markets through global value chains and e-commerce, and provide new export and investment opportunities through the expanded Match Australia programme.

…and education and training institutions

We will also continue to work with the education and training sector to capture the opportunities being created by the huge growth of global demand for education and training, and we will finalise and implement the new Australian International Education 2025 market development plan.

Continuing to provide value to Australian exporters

Austrade’s strategy and operations remain focused on providing maximum value to the Government and Australian businesses and institutions. In a rapidly changing global economy, Austrade’s role in helping exporters exploit emerging opportunities in markets around the world is becoming increasingly important. We know we help exporters overcome the cultural and regulatory barriers they say are the biggest impediments to successful exporting. With the Australian economy shifting focus from the mining investment boom, Austrade’s work in supporting exporters, helping to diversify Australia’s export sectors, and our increased focus on attracting productive foreign direct investment to Australia, play an important role in growing the prosperity and productivity of the Australian economy.

Bruce Gosper Chief Executive Officer

13 Part 01 / Agency overview. Chief Finance Officer’s review

Chief Finance Officer’s review

Year in review Austrade continued to maintain an effective financial management framework and achieved improvements in practices and processes. These included steps to strengthen the framework of onsite internal reviews of the controls, compliance and processes in offshore and onshore locations, together with further enhancements to internal compliance processes and reporting.

In 2014-15, the Government provided Austrade with $182.5million in funding for ordinary annual services. Revenue from Government increased by $5.7million compared to 2013-14. This was primarily due to the supplementation for foreign exchange losses arising from the weakening Australian dollar under the Government’s ‘no win, no loss’ provisions.

In addition, Austrade received $26million in revenue from external sources, up $2.1million from 2013-14, primarily because of increased cost recovery from the provision of tourism research services to other government agencies. Expenditure was also higher this year in line with inflation, foreign exchange movements and the Government’s decisions. Austrade also received $17.8million to fund capital expenditure.

Administered expenditure was significantly higher in 2014-15 due to higher demand experienced by the Export Market Development Grants scheme.

Table 1 shows Austrade’s financial performance during the last four years, and the change in dollar value from 2013-14 to 2014-15 measured as a percentage (see page 14).

Outlook for 2015-16 In the 2015-16 Budget, Austrade received new departmental funding of $65.2million across the forward estimates, with $20.2million allocated to 2015-16. Austrade will work hard to ensure that these activities are undertaken and fully functional in accordance with the underlying funding agreements.

The funding covers five new measures:

âº free trade agreement outreach ($12.0million) âº strengthening investment ($5.9million) âº the Match Australia programme ($1.1million) âº Australia Week events ($0.8million)

âº developing Northern Australia ($0.4million).

Despite the new funding, the tight fiscal environment remains challenging. Austrade’s Executive continues to explore options to identify the least impactful strategies available to address a progressive reduction in base appropriation across the next few years. As a result of the actions it will implement, Austrade expects to continue to achieve its outcomes within its reduced base funding envelope.

Robert O’Meara Chief Finance Officer

14 Australian Trade Commission Annual Report 2014-15

Table 1: Austrade’s financial performance, 2011-12 to 2014-15

Departmental financial performance

2011-12 2012-13 2013-14 2014-15 Change from

($m) ($m) ($m) ($m) 2013-14 (%)

Revenue from government 167.2 160.0 176.8 182.5 3.2

Revenue from other sources 19.9 17.4 23.9 26.0 8.8

Gains 0.2 0.2 0.3 0.3 0.0

Total income 187.3 177.5 201.0 208.8 3.9

Employee expenses 108.9 110.5 124.6 129.3 3.8

Supplier expenses 75.1 63.6 71.3 74.6 4.6

Depreciation 17.6 17.5 18.1 19.2 6.1

Other expenses 0.3 0.6 0.8 1.1 37.5

Total expenses 201.9 192.2 214.8 224.3 4.4

Operating result (loss) (14.6) (14.7) (13.8) (15.5) 12.3

Financial assets A 57.4 59.8 46.7 53.6 14.8

Non-financial assets B 46.9 57.8 63.9 61.0 4.5

Liabilities C 49.2 54.1 53.1 51.6 2.8

Net assets = A+B-C 55.1 63.5 57.5 62.9 9.4

Administered financial performance

2011-12 2012-13 2013-14 2014-15 Change from

($m) ($m) ($m) ($m) 2013-14 (%)

EMDG scheme—grants expense 127.2 118.4 116.1 137.8 18.7

ABEP—grants expense - - 1.8 1.4 22.2

Total administered expenses(a) 135.1 125.9 124.6 146.0 17.2

EMDG = Export Market Development Grants

ABEP = Asian Business Engagement Plan

(a) Includes EMDG scheme administrative costs.

Notes: Some figures have been rounded. An increase in dollar value (revenue, expense, asset or liability) is shown as a positive percentage, and a decrease is shown as a negative percentage. The exception is the operating result, where a movement to a smaller loss shows as a positive percentage. (All positive percentage changes are shown as an upward arrow, and all negative percentage changes are shown as a downward arrow.)

REPORT ON PERFORMANCE

T R PA 02

Reporting framework 16

Outcome 1 17

Contribute to Australia’s economic prosperity by promoting Australia’s export and other international economic interests through the provision of information, advice and services to business, associations, institutions and government.

Programme 1.1: Promotion of Australia’s export and other international economic interests 17

Objectives 17

Deliverables and key performance indicators 19

Promoting Australian trade internationally 32

Austrade’s services to Australian businesses 36

Promoting Australian education and training internationally 50

Attracting productive foreign direct investment to Australia 57

Strengthening Australia’s tourism industry 68

Aus

trade’s international network 83

Working across government 99

Promoting Australia through online channels, media and marketing 109

Programme 1.2: Programmes to promote Australia’s export and other international economic interests 113

Objective 113

Deliverables and key performance indicators 113

Export Market Development Grants scheme 116

Asian Business Engagement Plan 126

Outcome 2 127

The protection and welfare of Australians abroad through timely and responsive consular and passport services in specific locations overseas.

Programme 2.1: Consular and passport services 127

Objective 127

Deliverables and key performance indicators 127

Austrade-managed consulates 130

Reporting framework

Austrade operates under the Australian Government’s outcomes and programmes framework. Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Government programmes are the primary means by which agencies achieve their intended outcomes.

The 2014-15 Portfolio Budget Statements for the Foreign Affairs and Trade portfolio identify the outcomes and associated deliverables and key performance indicators that the Government uses to assess Austrade’s performance.

In 2014-15, Austrade had two outcomes that were achieved through specific programmes. Its outcome and programme framework is shown in Figure 3.

In this report, objectives, deliverables and key performance indicators, including a summary of key results against Austrade’s performance framework, are provided at the start of each programme.

Achievements are reported using a combination of methods, including charts, tables, narrative discussion and case studies. The performance reporting in this section is structured to align with Austrade’s key functions and enables this report to be easily read with Austrade’s 2014-15 Portfolio Budget Statements, its reporting framework and 2014-15 Corporate Plan.

Figure 3: Austrade’s outcome and programme reporting framework for 2014-15

Outcome 1

institutions and government.

Outcome 2 The protection and welfare of Australians abroad through timely and responsive consular

and passport services in specific locations overseas.

Programme 1.1

Promotion of Australia’s export and other international economic interests

Programme 1.2

Programmes to promote Australia’s export and other international economic interests

Programme 2.1

Consular and passport services

Part 02 / Report on performance. Outcome 1 - Programme 1.1 17

Outcome 1

Programme 1.1: Promotion of Australia’s export and other international economic interests

Objectives âº Identify international commercial opportunities that match Australian comparative advantage, particularly in agribusiness and

food, services sectors (including tourism, wealth management, and education and training), advanced manufacturing, mining and gas equipment technology and services, plus knowledge-based and other innovative industries.

âº Provide market information, specific services and advice to help businesses and institutions capitalise on opportunities that Austrade or others identify.

âº Contribute to the growth in demand for Australian education, the repositioning of Australia as a provider of high-quality education services to international students, and the building of a sustainable Australian international education sector by promoting Australia’s education sector overseas.

âº Work in partnership with Australian Government departments, and state and territory governments, to effectively influence foreign companies to make productive foreign investment into Australia, particularly in the priority areas of food and agribusiness, resources and energy, economic infrastructure, tourism infrastructure, and advanced manufacturing, services and technology.

âº Provide access to in-market networks and decision-makers.

âº Lead the development and implementation of tourism policy to maintain and promote a competitive tourism sector and facilitate the growth of domestic and international tourism.

âº Provide tourism research and statistics to guide policy development and support business marketing and decision-making.

âº Effectively coordinate with other Australian Government agencies, and the states and territories.

18 Australian Trade Commission Annual Report 2014-15

Programme 1.1 highlights

Trade

âº 78percent of Australian organisations indicated that Austrade made a positive contribution to their international business activities.

âº 75percent of Australian organisations indicated that they achieved some form of commercial outcome as a result of working with Austrade.

âº Austrade worked with the Department of Foreign Affairs and Trade to commence delivery of an Australia-wide free trade agreement seminar series that shows how companies can take advantage of the trade agreements with Japan, Korea and China. Relevant ministers and Austrade’s senior trade commissioners have given presentations at seminars held to date.

âº Austrade published E-commerce in China: A guide for Australian business and began work on an outreach programme promoting e-commerce as a major new avenue to the China market.

Education

âº Austrade began work on a long-term market development plan for the education and training sector, called Australian International Education 2025, to maximise the sector’s contribution to Australia’s economy, society and international standing.

âº Austrade continued to expand the reach of the Future Unlimited brand, with 75percent of students in the Top 200 CRICOS-registered organisations in Australia covered by Future Unlimited brand licences.

Investment

âº Austrade shared 312investor leads with state and territory governments, including 91 site visits by investors, and identified and qualified 39investor-ready projects across Australia within the Government’s five investment priority sectors.

âº Austrade conducted 109 investment events, including 29 investor roundtables hosted by the Minister for Trade and Investment in 10 countries.

âº Austrade was given nomination responsibilities for the Significant Investor Visa and a new Premium Investor Visa. Austrade worked with the Department of Immigration and Border Protection on the design of the new complying investment framework for both programmes.

Tourism

âº In 2014, Austrade provided assistance to five major tourism projects, progressing more than $2billion worth of development that will support 12,000 jobs.

âº Austrade delivered seven tourism employment plans in key ‘hot spot’ regions that are experiencing acute labour and skills pressures.

âº 81percent of tourism operators who use Austrade’s tourism research and information indicated that it helped support their marketing and business decisions.

Business missions

âº Austrade supported Australian businesses and institutions at international business events around the world, including Australia Business Week in India. This year, Austrade organised 14 minister-led missions involving 517 Australian companies and 650 registered Australian delegates.

âº Austrade progressed its global value chains strategy, including through a minister-led aerospace mission to Singapore. A number of participants are in advanced negotiations with their Singapore counterparts on taking part in their multinational supply chains.

Online

âº There were more than 1.8 million visitors to Austrade’s website, www.austrade.gov.au. The website is a valuable source of information and market intelligence to exporters, international students and overseas businesses seeking suppliers.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 19

Deliverables and key performance indicators This section includes narrative discussion, case studies and other specific examples that demonstrate Austrade’s performance against its deliverables and key performance indicators for the year.

Tables 2 and 3 summarise the results for programme1.1 against the deliverables and key performance indicators set out in Austrade’s 2014-15 Portfolio Budget Statements.

Table 2: Summary of results for programme 1.1 deliverables

Deliverables

Australia’s export and other economic interests are maximised through a strategic approach. Austrade works with other Australian Government agencies, state and territory governments, and industry associations on the planning and execution of work programmes to provide a coordinated approach to assist Australian businesses to take advantage of identified opportunities and broaden Austrade’s impact and reach. In international markets, work programmes target international business opportunities that align with Australian industries’ comparative advantage. Within Australia, Austrade uses its unique commercial information and insight gathered within its international and domestic network to provide government with policy advice and economic information. Austrade’s deliverables are as follows:

Assist Australian businesses and institutions to access in-market opportunities identified by Austrade and others, through the provision of relevant and commercially useful information and market-related services and advice.

Austrade provides the most value for Australian businesses and institutions in markets where language and business culture can be a barrier, where there is less openness of regulatory frameworks and transparency of business processes, where there are difficulties accessing distribution channels and commercial connections, and where the value of Austrade’s status as a government agency (the badge of government) is highest.

Austrade’s trade facilitation resources are weighted towards Asian and other growth and emerging markets that have high potential, with a strong focus on international trade and education opportunities that align with the comparative advantage of Australian businesses; and when there is a clear role for government involvement. In Asia, Austrade promotes foreign direct investment only in countries with deep capital markets.

In 2014-15, drawing on its commercial knowledge, its international network, and its relationships and connections with international customers, investors and decision-makers, Austrade identified valuable trade and other international

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business opportunities for Australian businesses and institutions that matched their capability, capacity and interest.

20 Australian Trade Commission Annual Report 2014-15

Deliverables

These reliable international business opportunities came from sectors in which PAGE

Australia has a comparative advantage and Austrade can add value in helping 36

businesses and institutions to access these opportunities. During the year, Austrade advised exporters on the most promising markets for their business, provided services—such as market research and identifying and establishing contact with potential partners, service providers and customers—and provided global value chain and e-commerce access advice and programmes.

In 2014-15, Austrade worked with other countries to improve their regulatory and PAGE

governance systems by learning from the Australian experience and promoting 86

Australian policy and regulatory frameworks as solutions to foreign governments. This also provided Australian exporters with a competitive edge, as shown in Austrade’s work in delivering Australian road safety expertise and services in India.

Another example of how Austrade delivers opportunities to Australian businesses PAGE

and institutions is through the management of international trade and business 103

missions led by ministers and the Prime Minister (see below).

Build linkages and networks with key decision-makers, buyers, investors and institutions, and facilitate access for Australian businesses and institutions in international markets.

Austrade has deep networks of connections and contacts in overseas markets PAGE

that include businesses, industry associations, governments and authorities. 83

Through these networks, Austrade identifies significant or emerging international business opportunities, and connects Australian businesses with them.

Feedback from the businesses that Austrade works with indicates that they value the agency’s ability to help them gain access to these networks.

Assist and facilitate Australian businesses’ and institutions’ participation at international business events and in minister-led overseas business delegations.

Austrade supported Australian businesses and institutions at international PAGE

business events around the world, including through minister-led business 103

missions. In 2014-15, Austrade organised 14 minister-led trade and investment missions involving 517 Australian companies and 650 registered Australian delegates.

By participating in these missions, Australian businesses can connect with PAGE

potential international customers and investors and achieve commercial 84

outcomes. For example, 90percent of the 450 participants in the Australia Business Week in India mission expect a commercial outcome in the next year.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 21

Deliverables

Assist Australian firms and institutions with ‘behind the border’ barriers to trade and investment, consistent with legal obligations, including anti-bribery and corruption laws both in Australia and overseas.

For Australian businesses and institutions, market access is most challenging where governments play a significant role in the economy, where language and business culture are a barrier, where there is less openness of regulatory frameworks and transparency of business processes, and where there are difficulties accessing distribution channels and commercial connections. In such markets, the value of the badge of government is highest. In 2014-15, Austrade continued to work with Australian firms in overseas markets to help them navigate different business cultures and languages and local regulatory requirements, and provided advice on how to engage local customers and authorities.

Austrade also promoted market access improvements for services exporters arising from the North Asia free trade agreements that have entered into force.

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Austrade worked closely with the Department of Foreign Affairs and Trade and the Department of Agriculture to influence policy development in Australia’s trading partners to try to reduce regulatory barriers and provide a competitive advantage to Australian exporters.

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103

Austrade collaborated with other Australian Government agencies, business groups, chambers of commerce and other organisations on anti-bribery programmes in support of the work of the Organisation for Economic Co-operation and Development and Transparency International.

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142

Provide Australian business and education providers with quality referrals to third-party professional and business service providers to assist them in complex and unfamiliar international service markets.

Austrade provides quality referrals to third-party professional and business PAGE

service providers when they are better placed to assist Australian organisations 36

with a specific need. In 2014-15, Austrade provided 853 referrals to third-party service providers for Australian organisations.

Help increase demand for Australia’s education services, particularly transnational education, by positioning Australia as a provider of high-quality services to international students, including through the Future Unlimited brand, in order to assist in building a sustainable Australian international education sector.

In 2014-15, Austrade began work on a long-term market development plan for PAGE

the education and training sector. Titled Australian International Education 2025, 51

the plan is being developed through an extensive consultation process with stakeholders.

22 Australian Trade Commission Annual Report 2014-15

Deliverables

The number of Future Unlimited brand licensees increased by 25per cent, from 315 at 30June 2014 to 394 at 30June 2015. This includes 281Australian institutions and 113overseas stakeholders and education agents.

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Austrade also conducted a transnational education roadshow in various locations around Australia in October 2015 to encourage education and training providers to diversify by delivering their programmes offshore, in addition to recruiting

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international students to Australia.

Manage the Study in Australia website, which promotes the benefits of studying in Australia to international students; provides information on courses that meet Australia’s registration, accreditation and quality assurance standards in their own country; and provides guides to study costs and information about living in Australia.

Austrade continued to administer the Study in Australia website. In 2014-15, PAGE

the number of visitors to the website was 1,653,593, an increase of almost 53

14percent, with almost 85per cent of visitors from offshore.

Study in Australia on Facebook, Twitter and YouTube also had significant interest from social media participants.

Assess applications for income tax exemption available under section23AF of the Income Tax Assessment Act 1936, to assist the international competitiveness of Australian companies and government organisations competing to win international tenders.

In 2014-15, Austrade granted 87 approvals in response to 80 applications from PAGE

20applicants under section 23AF of the Income Tax Assessment Act 1936. 38

Partnering with state and territory government agencies, implement productive foreign direct investment strategies in agreed priority areas of food and agribusiness, resources and energy, economic infrastructure, tourism infrastructure, and advanced manufacturing, services and technology.

Austrade chaired, managed or played a major role in a number of forums or PAGE

committees that provide avenues for consultation and coordination between state 99

and territory governments, including:

âº Trade and Investment Ministers’ Meetings, held twice in 2014-15, chaired by the Minister for Trade and Investment

âº the Senior Officials Trade and Investment Group, which met twice in 2014-15 âº the National Investment Advisory Board, which met twice in 2014-15.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 23

Deliverables

Austrade worked with the Department of Immigration and Border Protection and stakeholders on the development of the new complying investor visa framework for the Significant Investor Visa and Premium Investor Visa.

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101

Proactively target potential investors, promoting specific investment opportunities, promoting Australia’s economic credentials and detailing the regulatory environment.

From July 2014, five senior investment specialists were appointed to Austrade from the private sector to add to Australia’s capacity to attract foreign investment. Each specialist brings deal-making and facilitation experience, as well as deep expertise in their respective sectors that aligns with the Government’s five investment priorities. Austrade’s senior investment specialists work with Austrade’s onshore investment teams, and with states and territories, to identify specific investment opportunities in Australia, facilitate investment projects, and provide aftercare and reinvestment services.

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This year, Austrade collaborated across all levels of government on a number of events and initiatives, including:

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âº the Australian Investment Forum in Sydney in July 2014—Austrade’s engagement with organisations contributed to 12 investment outcomes, six of which had a total investment value exceeding $2billion

âº the International Mining and Resources Conference in Melbourne in September 2014

âº the International Dairy Investment Forum in Melbourne, in September 2014, through which Austrade identified 12investors with strong interests in Australia PAGE 62

âº the China Entrepreneur Club’s Australian visit in December 2014—Austrade demonstrated key investment opportunities to representatives of some of China’s leading privately owned companies

âº the Australia Business Week in India in January 2015, which included investment events on innovation in the resources and energy sectors, involving 62delegates from India’s top private and public sector energy and steel producers; the week also included roundtable and boardroom briefings

âº investor roundtables, hosted by the Hon Andrew Robb AO MP, Minister for Trade and Investment, held as part of the Match Australia programme in early 2015, coinciding with the Australian Open tennis quarter final, the AFC Asian Cup final, and the ICC Cricket World Cup. MrRobb hosted a total of 29investor roundtables in 10countries throughout 2014-15.

24 Australian Trade Commission Annual Report 2014-15

Deliverables

Introduce potential foreign investors to state and territory governments.

During 2014-15, Austrade shared 312investor leads with state and territory governments, including 91 site visits by investors. PAGE 58

Austrade worked closely with state and territory governments and key industry stakeholders to identify and qualify 39investor-ready projects across Australia within the five investment priority sectors.

Continue to promote Australia using collateral developed through the Australia Unlimited brand programme in target markets to advance Australia’s image and reputation in trade, investment and education.

Austrade continued to encourage the use of the Australia Unlimited brand by other PAGE

government agencies and industry bodies as part of their international marketing 110

activities. The brand featured prominently at events such as Australia Business Week in India; Investing in African Mining Indaba in South Africa; Australia Unlimited MENA2015 in the Middle East and North Africa region; SIAL China; and the International Mining and Resources Conference in Melbourne.

Around 70 new stories profiling Australians and Australian achievements were also made available on a number of digital platforms, and successful campaigns on Twitter, Facebook and LinkedIn have resulted in the number of social media followers increasing to nearly 15,000.

Administer and manage the main Austrade website, which provides information and online services to Australian businesses and institutions, showcases Australia’s capability and potential to international buyers and investors, and provides a centralised point of contact and engagement between businesses, institutions and Austrade staff.

In 2014-15, there were more than 1.8 million visits to Austrade’s website and page PAGE

views increased by 25per cent compared to last year. Around 40per cent of 109

Austrade’s website traffic this year was from overseas users seeking information about Australian products and services, or investing in Australia.

Austrade updated its 200 country profiles in 2014-15. This was the most accessed area of the website, receiving more than 800,000 page views.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 25

Deliverables

Implement Tourism 2020 to improve the productive capacity of the tourism industry, including contributing to the delivery of 2014 priorities agreed by tourism ministers and development of the Tourism 2020 Strategic Plan.

Austrade worked with Tourism Australia, the Department of Foreign Affairs and PAGE

Trade, state and territory tourism organisations and the tourism industry to 70

develop and implement the next phase of the Tourism2020 strategy, including a programme of activities endorsed at the Tourism Ministers’ Meeting in October 2014, and reforms recommended by the Australian Standing Committee on Tourism in April 2015.

Austrade cooperated with other government agencies and tourism industry PAGE stakeholders to enhance tourism access, including through streamlining visa 72 and passenger facilitation arrangements, and improving air services and aviation connectivity.

Engage with key tourism stakeholders to ensure their interests are taken into account within policy development and implementation, including in relation to labour and skills, infrastructure development and regulatory issues that impact tourism.

Austrade continued to provide policy advice to the Government throughout PAGE

the year to remove barriers and encourage investment in tourism infrastructure 73

and the supply of services to tourists. These services include transport (such as aviation and cruise shipping), visas, labour and skills, building and planning regulations, and other barriers to investment and the ongoing productivity of the sector.

Austrade worked with Australian, state and territory government agencies PAGE to foster a supportive and streamlined regulatory environment for tourism 73 investment, which included participation in the Investment Attraction Partnership Group. Austrade also worked closely with the sector’s four peak industry groups, consulting more than 160industry leaders to identify potential reform areas that were prioritised by governments and representatives of the four industry groups.

Austrade delivered seven tourism employment plans (TEPs) in key ‘hot spot’ PAGE

regions that are experiencing acute labour and skills pressures, with an eighth 76 TEP to be delivered in Tasmania in 2015-16. At 30June 2015, TEPs had delivered 120targeted strategies, working with 1,200stakeholders to support regional workforce planning.

Austrade also developed A guide to developing tourism employment plans and a TEP advisory service to support additional regions with labour and skills shortages. Other resources developed include a workforce planning guide and TEP tools website, with information to support tourism and hospitality businesses with recruitment, retention and skills needs.

26 Australian Trade Commission Annual Report 2014-15

Deliverables

Deliver an enhanced China Approved Destination Status scheme, to ensure a quality tourism experience for Chinese group leisure tourists.

Austrade released a revised Code of Business Standards and Ethics for the China PAGE

Approved Destination (ADS) scheme in December 2014, which came into effect 82

in January 2015. The revised code provided for the inclusion of tour guides in the ADS scheme, in addition to inbound tourism operators.

At 30 June 2015, there were 69 approved ADS inbound tourism operators and 2,316 tour guides had been approved under the scheme.

Transition the National Tourism Accreditation Framework (T-QUAL Accreditation) to industry.

The Government announced before the 2013 federal election that it would PAGE

transfer responsibility for T-QUAL Accreditation to industry through a 77

tender process. The tender process found no industry-based organisation that demonstrated an ongoing and long-term business model for T-QUAL Accreditation. The Government ceased T-QUAL Accreditation on 30 June 2014. Austrade implemented strategies for closure and stakeholder engagement to wind up the programme.

Produce and disseminate strategic tourism research and forecasts, including the 2014 State of the Industry report.

Austrade, through Tourism Research Australia (TRA), continued to measure the PAGE

structure and performance of the Australian tourism industry through strategic 78

and economic research. It delivered tourism business and employment data, and economic impact and regional expenditure data. Key publications released in 2014-15 included the State of the Industry 2014, Tourism Investment Monitor 2015, Tourism Forecasts: Autumn 2014, State Tourism Satellite Accounts 2013-14, Tourism Regional Profiles 2013-14 , and Local Government Area Profiles .

TRA also delivered its quarterly International Visitor Survey and National Visitor Survey, and its Destination Visitor Survey, and undertook Asia Marketing Fund research in partnership with Tourism Australia to assist efforts to grow tourism demand from Asia. TRA released 24research reports in 2014-15.

Administer and manage the Tourism Research Australia website, which provides information and research services that underpin tourism policy development and help improve the performance of the tourism industry for the benefit of the Australian community.

Austrade continued to manage the Tourism Research Australia (TRA) website, PAGE

which received 89,342 visits in 2014-15. The website freely supplied most TRA 80

research, including a broad range of statistics collected from the International Visitor Survey and National Visitor Survey. TRA continued to generate revenue from customised data requests and subscriptions to TRA Online, a database containing time-series data from the International Visitor Survey and National Visitor Survey.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 27

Deliverables

Draw on Austrade’s global and commercial perspective to provide policy advice and economic insight to government.

Austrade provided global and commercial perspectives throughout the year to inform the policy advice and economic insights of Australian, state and territory government agencies. It did this through a number channels, including strategic

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partnerships, collaborating on joint initiatives, and convening or taking part in a number of forums that provide avenues for consultation and coordination between state and territory governments on trade, investment, education, and tourism policy issues.

Table 3: Summary of results for programme 1.1 key performance indicators

Key performance indicator

Satisfaction

High level of satisfaction by ministers, Australian business community, institutions and key partners with Austrade’s services.

Austrade’s Service Improvement Study is independently conducted on a quarterly basis to assess the agency’s service delivery and identify areas of improvement in its services to businesses and institutions.

In 2014-15, the Service Improvement Study found that 89percent of Austrade’s PAGE

clients were satisfied with their dealings with the agency during the past 41

12months. The same result was achieved in 2013-14.

The survey also showed that 80percent of clients rated Austrade’s paid services as representing good value for money. This is an increase on the 2013-14 figure of 79percent.

Austrade also updated several service policies and procedures throughout the year to help staff deliver consistent levels of service across Austrade’s dispersed network.

The office of the Minister for Trade and Investment indicated a high level of PAGE

satisfaction with Austrade’s comprehensive ministerial business missions 84

programme. Mission participants have also expressed positive feedback; for example, 98percent of Australia Business Week in India participants were satisfied with their experience.

28 Australian Trade Commission Annual Report 2014-15

Key performance indicator

Trade

Proportion of Australian businesses that have engaged with Austrade, and say Austrade made a positive contribution to their international business activities.

In 2014-15, Austrade’s Service Improvement Study found that 78percent of PAGE

Australian organisations indicated that Austrade made a positive contribution to 42

their international business activities. The same result was recorded in 2013-14.

Proportion of Australian businesses that have engaged with Austrade, and say they achieved some form of commercial outcome as a result of working with Austrade.

In 2014-15, Austrade’s Service Improvement Study found that 75percent of PAGE

Australian organisations indicated that they achieved some form of commercial 42

outcome as a result of working with Austrade. This is an increase on the 2013-14 figure of 71percent.

Education

Proportion of Australian education institutions that have engaged with Austrade, and say Austrade made a positive contribution to their international business activities.

In 2014-15, Austrade’s Service Improvement Study found that 88percent of Australian institutions indicated that Austrade made a positive contribution to their international business activities. This is an increase on the 2013-14 figure of 79per cent.

Proportion of Australian education institutions that have engaged with Austrade, and say they achieved some form of commercial outcome as a result of working with Austrade.

In 2014-15, Austrade’s Service Improvement Study found that 87percent of Australian institutions indicated that they achieved some form of commercial outcome as a result of working with Austrade. This is an increase on the 2013-14 figure of 76percent.

Investment

Austrade has a shared set of key performance indicators with the states and territories:

The number of investment outcomes facilitated.

Austrade, along with its key partners in state and territory governments and PAGE

industry sectors, contributed to 92 inward investments during 2014-15. This is an 58

increase of 28percent on last year’s figure of 72 inward investments.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 29

Key performance indicator

The amount of capital expenditure associated with foreign direct investment outcomes facilitated.

There was $7.75billion of capital expenditure associated with foreign direct investment outcomes facilitated in 2014-15. PAGE 58

Please note that this information is supplied by inward investors only, on a voluntary basis, and does not cover all inward investments.

The number of new jobs created/retained (ongoing full-time equivalents) as a direct result of investment outcomes facilitated.

There were 17,685 new ongoing full-time equivalent jobs created or retained as a PAGE

direct result of investment outcomes facilitated.

Please note that this information is supplied by inward investors only, on a voluntary basis, and does not cover all inward investments.

The anticipated annual exports from investment outcomes facilitated.

There were $14.5million worth of anticipated annual exports from investment outcomes facilitated in 2014-15.

Please note that this amount is supplied by inward investors only, on a voluntary basis, and most did not supply this information in 2014-15.

Noting that investments can have gestation times that span multiple years from the initial investor contact to actual investment commitment, results will not be fully realised in the short term. In the shorter term, in accordance with the protocols developed with the states and territories, Austrade is responsible for proactively promoting Australia as an attractive investment destination measured by:

The number of investment promotional events and roundtables conducted.

Austrade conducted 109 investment events throughout 2014-15. This included PAGE

29investor roundtables hosted by the Minister for Trade and Investment in 63

10countries.

The number of information, project and visitation requests generated from potential investors.

There were 171 information, project and visitation requests generated from potential investors in 2014-15. This is an increase of 44percent on the 2013-14 figure of 119.

The number of investor introductions provided to the states and territories.

There were 141 investor introductions provided to the states and territories in 2014-15. This is an increase of 36percent on the 2013-14 figure of 104.

30 Australian Trade Commission Annual Report 2014-15

Key performance indicator

Tourism

Priorities and outputs outlined in the Tourism 2020 Implementation Plan for 2014 progressed in accordance with agreed timeframes.

Austrade progressed the four priorities it has responsibility for in the Tourism 2020 Implementation Plan 2015-2020 in accordance with agreed timeframes set by the Australian Standing Committee on Tourism. These included:

Increase cross-portfolio collaboration

âº Austrade engaged extensively with Australian Government agencies to progress key reforms, including visa reform and improved aviation capacity. PAGE 70 Improve visa arrangements

âº Four visa trials were announced as part of the White Paper on Developing Northern Australia, including a 10-year multiple entry visitor visa for Chinese nationals, fast-tracked processing (for a fee), online application lodgement in

PAGE

simplified Chinese, and the rollout of online visitor visa lodgements for visitors from China and India.

âº Reforms to the working holiday visa and seasonal worker programme were also announced as part of the White Paper on Developing Northern Australia.

Improve aviation capacity

âº New air services arrangements were introduced with China, Chile and the Philippines, resulting in a significant increase in capacity and providing greater PAGE 73 access to Australian gateway airports.

Develop a skilled tourism workforce

âº Austrade delivered seven tourism employment plans in key ‘hot spot’ regions that are experiencing acute labour and skills pressures. PAGE 76 In 2014, Austrade provided assistance to five major tourism projects, progressing more than $2billion worth of development that will support 12,000jobs.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 31

Key performance indicator

Proportion of tourism operators who use Austrade’s tourism research and information and say it helped support their marketing and business decisions.

81percent of tourism operators who use Austrade’s tourism research and information indicated that it helped support their marketing and business decisions.

Whole-of-government

Effective contribution to whole-of-government policy development using Austrade’s commercial perspectives on export, investment, international education and tourism.

Austrade uses its commercial perspective, working collaboratively across all PAGE

levels of government, as well as with industry associations and chambers of 99

commerce, specifically on trade, investment, education, and tourism policy issues. Key examples included supporting various government policy initiatives, including a new complying investor visa framework, and several white papers and cross-government initiatives, such as the White Paper on Developing Northern Australia, the Agricultural Competitiveness White Paper, the Rethink tax: Better tax, better Australia discussion paper, the Energy White Paper, the Australian Customs and Border Protection Service’s Trusted Trader programme, and the Industry Productivity and Competitiveness Agenda.

32 Australian Trade Commission Annual Report 2014-15

Promoting Australian trade internationally Austrade assists Australian businesses and institutions to access commercial opportunities in overseas markets. It draws on its deep commercial knowledge, its international network, and its relationships and connections with international customers and decision-makers to identify valuable international business opportunities and help Australian businesses and institutions take advantage of those opportunities.

Through a framework of four different routes that exporters can take to access international markets, Austrade directs its resources to the areas of greatest opportunity for Australian exporters. These are:

âº global value chains—More than 80percent of the world’s manufactured exports are unfinished goods. The integration of business supply chain processes with global digital access provides new opportunities for best-in-class Australian solutions and competitive advanced manufacturing suppliers to more easily and efficiently participate in the procurement requirements of multinational corporations.

âº Policy, Research, Equipment, Technology, Skills and Services (PRETSS) framework— This Austrade framework takes a holistic, market-wide approach to defining exactly what is required to meet a high-value opportunity. It targets and sometimes helps develop the policies, regulations and governance required to meet that opportunity, as well as the research requirements and equipment or goods, technology, skills and services needed that can be supplied by Australian companies. The PRETSS framework has proven to be particularly effective in emerging markets.

âº e-commerce—Online retail and cross-border e-commerce portals have now been combined with international delivery and payment agencies, such as Australia Post and Alipay, to provide a simplified, end-to-end logistics solution. It is particularly useful for small businesses, enabling them to reach into large and growing consumer markets like China, Japan, Korea, India and the Association of Southeast Asian Nations (ASEAN).

âº trade missions and events—Austrade targets Australian comparative advantage, capacity and capability within inbound and outbound missions and events, delivering a more targeted business opportunity for participants in these activities.

In 2014-15, building on extensive market analysis of global demand, Austrade focused on six key industry sectors that reflect Australian capability, capacity, appetite and competitive advantage. These were:

âº food and agribusiness—leveraging Australia’s credentials for clean and safe premium food and beverages, as well as sustainable and productive agricultural techniques and solutions

âº resources and energy—particularly mining equipment, technology and services, and related education, training and research; oil and gas technologies, including engineering and technology solutions and work health and safety; and energy efficiency technologies and management solutions

âº health—focusing on disruptive technologies and health services, including health information technology and software, medical devices, aged care and senior living, biotechnology research, clinical trials and pharmaceuticals

Part 02 / Report on performance. Outcome 1 - Programme 1.1 33

âº advanced manufacturing innovation— focusing on aerospace, defence, marine and automotive components and aftermarket technologies, and helping businesses to access global value chains

âº infrastructure—focusing on sustainable urban development; rail, road, port and aviation infrastructure, including technology, equipment, skills development and services; and water and waste management, environment protection and remediation solutions

âº services—focusing on financial services, information and communications technology, professional business advisory services, and Australia’s capability in the delivery of major sporting events.

Trade operating context

Austrade’s operating context in relation to trade is discussed below, followed by examples of achievements relating to its deliverables and key performance indicators for the promotion of Australian trade internationally (see tables 2 and 3 on pages 19-31).

For Austrade to operate effectively, it needs to understand the global trade environment and the characteristics of Australia’s exporters and exports.

The global trade environment

Annual world trade growth has continued to run at rates well below its pre-global financial crisis average of around 7percent. According to the International Monetary Fund (IMF), the volume of world trade in goods and services grew by a relatively sluggish 3.2percent in 2014, little changed from the 3.3percent recorded in 2013.1 The IMF forecasts a gradual increase in

the pace of trade expansion, with trade volumes expected to rise by 4.1percent in 2015, and 4.4percent in 2016. However, in recent years, official forecasts have tended to consistently overestimate the actual outcomes. Part of this gap likely reflects the still subdued pace of global output (GDP) growth.

There is also an emerging consensus among analysts of a structural shift in the world economy, meaning that a given rate of world GDP growth is now associated with a lower rate of trade growth than in the past. A range of possible explanations have been advanced for this change, including a slowdown in the pace of international trade liberalisation, shifts in the nature of emerging economy growth models, and a decline in the rate of expansion of global value chains—although, as yet, there is no definitive conclusion. As a result, the prospects for future world trade growth remain subject to significant uncertainty.

Australia’s exporter community

In 2013-14, Australian businesses sold a total of $330billion in exports of goods and services.2 This total included 45,306exporters of goods worth around $273billion, and around 2,788exporters of services valued at $57 billion.3 As is the case for many of the world’s economies, a relatively small number of exporters accounted for the bulk of total exports by value. Figures4 and 5 provide profiles of Australian goods and services exporters by value of exports and by number of exporters.

1 International Monetary Fund 2015, World Economic Outlook update, July 2015.

2 Australian Bureau of Statistics 2015, Characteristics of Australian exporters, 2013-14, cat.no.5368.05.55.006. There is no accurate methodology to calculate the overlap between goods and services exporters.

3 The Australian Bureau of Statistics excludes businesses that supply goods and services to foreign tourists and students domestically, sales of goods and services by Australian businesses to other Australian businesses for subsequent export, and exports of goods consignments with a value less than $2,000.

34 Australian Trade Commission Annual Report 2014-15

Goods exports

Eighty-ninepercent of all goods exports were exported by just 423Australian businesses, which each had exports greater than $50million in value. These large firms accounted for about 1per cent of the total number of goods exporters. A total of 9,112 exporters, or about 20per cent of all goods exporters, each had exports worth between $250,000 and $50million. This group accounted for more than $28billion of exports in 2013-14, or about 10percent of total goods exports by value. A further 35,771exporters, or about 79per cent of all goods exporters, each had exports worth less than $250,000. This largest group of exporters was responsible for about $1.5billion of exports, or less than 1per cent of the total goods exports for the year (Figure4).

Figure 4: Australian goods exporters, 2013-14

Percentage

100

Exporters with less than $250,000 of exports

Value of exports Number of exporters

Exporters with between $250,000 and $50 million of exports

Exporters with more than $50 million of exports

$273 billion of exports

$1.5 billion (1%)

$28 billion (10%)

$243 billion (89%) 35,771 (79%)

9,112 (20%)

45,306 exporters

423 (1%)

Note: Figures may not add up due to rounding.

Source: ABS, Characteristics of Australian exporters, 2013-14, cat. no. 5368.0.55.006, released 23June2015.

Services exports

Australia’s exports of services exhibit a similar relationship between the size of exporter and the contribution to total exports. In 2013-14, there were 108exporters, or about 4percent of the total, each with exports worth more than $50million. This group was responsible for about $13.5billion, or 67percent, of the total value of services exports attributed to individual exporters.4 Ninety-sixpercent of services exporters, each with exports worth less than $50million, were responsible for the remaining 33percent of total services exports (Figure5).

Figure 5: Australian services exporters, 2013-14

Percentage

Value of exports Number of exporters

Exporters with less than $50 million of exports

Exporters with more than $50 million of exports

$6.8 billion (33%)

100

$13.5 billion (67%)

2,680 (96%)

$20.2 billion of exports 2,788 exporters

108 (4%)

Note: Figures may not add up due to rounding.

Source: Characteristics of Australian exporters, 2013-14, cat. no. 5368.0.55.006, released 23June2015.

4 The Australian Bureau of Statistics (ABS) excludes businesses that supply goods and services to foreign tourists and students domestically, sales of goods and services by Australian businesses to other Australian businesses for subsequent export, and exports of goods consignments with a value less than $2,000. Due to these exclusions, the ABS does not produce a breakdown by size and number for services exporters accounting for $37 billion or 65percent of the total.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 35

Direction of exports

In 2014, Australia exported a total of $327billion of goods and services, comprising $267billion of goods and $60billion of services.5 Total exports were up about 2.5percent on the previous year in value terms, with goods exports rising by almost 1.3percent, while exports of services were up by 8.5percent.

Northeast Asia continued to dominate Australia’s export profile, receiving 56percent of Australia’s total exports. Australia’s exports to ASEAN accounted for a further $40billion, or around 12.3percent of total exports. Total Australian exports of goods and services to East Asia in 2014 were worth almost $224billion, or just over two-thirds of all export earnings. Exports to the European Union nations were around 6.8percent of total exports, while exports to the

United States, which is Australia’s fourth-largest export market, were around 5.7percent of total exports. A breakdown of Australia’s top10 export destinations is shown in Figure6.

Composition of exports

Exports of minerals and fuels accounted for almost half of total Australian goods and services exports in 2014, and exports of rural goods accounted for more than 12percent. Exports of manufactures had a 13percent share of total exports, while exports of other goods, including gold, accounted for around 6percent. Services exports made up more than 18percent of the total.6 The composition ofAustralia’s top10 exports in 2014 is shown in Figure7.

5 Department of Foreign Affairs and Trade 2015, Composition of Trade Australia 2014, at http://dfat.gov.au/about-us/publications/Pages/ composition-of-trade.aspx.

6 Department of Foreign Affairs and Trade 2015, Composition of Trade Australia 2014, at http://dfat.gov.au/about-us/publications/Pages/ composition-of-trade.aspx.

Figure 6: Australia’s top 10 export destinations for goods and services, 2014

100

Value of exports ($ billion)

China

Japan

ASEAN

European Union

Korea

United States

New Zealand

India

Taiwan

Hong Kong

Source: Department of Foreign Affairs and Trade 2015, Composition of Trade Australia 2014 , at http://dfat.gov.au/about-us/ publications/Pages/composition-of-trade.aspx.

36 Australian Trade Commission Annual Report 2014-15

Figure 7: Composition of Australia’s top 10 exports, 2014

Iron ores and concentrates

Coal

Natural gas

Education-related travel services

Personal travel (excluding education)

Gold

Crude petroleum

Beef

Aluminium ores and concentrates

Wheat

0 1 0 2 0 3 0 4 0 5 0 6 0 7 0

Value of exports ($ billion)

Source: Department of Foreign Affairs and Trade 2015, Composition of Trade Australia 2014 , at http://dfat.gov.au/about-us/ publications/Pages/composition-of-trade.aspx.

Austrade’s services to Australian businesses Austrade provides exporters with relevant and commercially useful information and advice, with access to its in-market networks, to decision-makers, and to business identified by Austrade and others.

Delivering opportunities to exporters

Delivering valuable international business opportunities to Australian firms, and helping those firms to make business connections in international markets, is an integral part of Austrade’s work. Through its in-depth relationships with overseas customers, Austrade identifies opportunities that correlate with Australian industry capability, capacity and appetite to export. It then delivers those opportunities to Australian exporters.

In 2014-15, Austrade provided 11,450 general and tailored services to 4,498 Australian organisations to help them access opportunities identified by Austrade and others.

Austrade undertook an internal review of its opportunities model in 2014, and a more flexible approach to quickly disseminating simple opportunities (sales leads) was established, which companies can pursue easily and without Austrade assistance. This approach means Austrade can focus on delivering longer-term, more productive business opportunities that may lead to higher returns, including through the PRETSS model and engaging in e-commerce. In 2014-15, Austrade distributed 303 sales leads.

Austrade provides quality referrals to third-party professional and business service providers when they are better placed to assist Australian organisations with a specific need. In 2014-15, Austrade provided 853 referrals to 644 organisations.

Accessing global value chains

Increased globalisation has led to the emergence of global value chains, where different stages of one production process are located around the world. In 2013, it was estimated that approximately 80percent of world trade was structured within global

Part 02 / Report on performance. Outcome 1 - Programme 1.1 37

value chains,7 causing a paradigm shift in business growth and international competitiveness. Overcoming obstacles to participation in global value chains can pay big dividends—developing economies with the fastest-growing participation in global value chains have GDP per capita growth rates 2percent above average.8

Among Organisation for Economic Co-operation and Development (OECD) countries, Australia’s firms are currently in the bottom half of the participation rate in global value chains,9 so Austrade is putting considerable resources into improving Australian businesses’ engagement in global value chains. Austrade’s extensive offshore network is uniquely positioned to understand the policies, organisations and people that influence the decisions of multinational companies, and to connect Australian services and manufacturing firms with decision-makers.

Achieving outcomes in global value chains

In 2014-15, Austrade advanced its Accessing Global Value Chains five-year strategy, focusing initially on the aerospace, automotive, and mining equipment, technology and services sectors. As part of this strategy, Austrade has targeted major multinational companies to help identify particular gaps or requirements within their value chains. Working with other government agencies, Austrade promoted best-in-class Australian

solutions and firms that can deliver gains in efficiency, sustainability, safety and productivity. Australian suppliers are then able to present their solutions to multinational companies.

For example, Austrade has been engaging with multiple contacts across aerospace hubs in Singapore to explore how Australian component manufacturers, with assembly and sub-assembly capabilities, can add value to relevant supply chains.

Austrade’s global mining customer access programme has built strong networks in Latin America, resulting in interest from procurement executives at Colombia’s Cerrejon, one of the world’s largest open-pit mines. Cerrejon is in discussions with Australian exporters for solutions in dump truck design, dust suppression and fuel efficiency.

Facilitating missions and events

Austrade facilitates Australian businesses’ and institutions’ participation at international business events, including minister-led missions, helping organisations to make connections with potential customers. Likewise, Austrade also supports other onshore and offshore events, such as trade shows. Austrade assisted 517 organisations’ participation in minister-led business missions to destinations like India, Latin America and New Zealand, among other markets.

For more information on Austrade’s coordination of minister-led business missions, where it takes the lead across government, see page103.

7 OECD 2013, Implications of global value chains for trade, investment, development and jobs, OECD, World Trade Organization and United Nations Conference on Trade and Development, p.7, www.oecd.org/sti/ind/G20-Global-Value-Chains-2013.pdf.

8 United Nations Conference on Trade and Development 2013, Global value chains and development: Investment and value added trade in the global economy.

9 OECD 2014, Global value chains: challenges, opportunities, and implications for policy, OECD, World Trade Organization and World Bank Group, www.oecd.org/tad/gvc_report_g20_july_2014.pdf.

38 Australian Trade Commission Annual Report 2014-15

Engaging online

Existing and potential exporters can learn about and access Austrade’s services through its website, www.austrade.gov.au. In 2014-15, there were 1,831,177 visits to Austrade’s website and 5,722,586page views. Approximately 40per cent of Austrade’s website traffic is from overseas users seeking information about Australian products and services, or investing in Australia. For more information on Austrade’s online services, see page 109.

Providing advice through Austrade Direct

Australian organisations can also learn about and access services from Austrade through Austrade Direct. This team of advisers provides practical advice over the phone or by email to help Australian companies assess their international readiness, and to guide them through their options as they pursue international markets and customers for their products and services. In 2014-15, Austrade Direct delivered export advice through 7,685 email enquiries and 7,500 inbound phone calls. Austrade Direct can be contacted via its dedicated phone number, 132878, or by email to info@austrade.gov.au.

Approving exemptions under section 23AF of the Income Tax Assessment Act 1936

Supporting the work of the Australian Taxation Office, Austrade has the delegation to determine approved project status under section23AF of the Income Tax Assessment Act 1936. This allows individuals who worked overseas on an approved project, for a continuous period of at least 91days, to be exempt from Australian income tax. While Austrade approves project applications, actual granting of exemptions rests with the Australian Taxation Office.

This exemption typically applies to projects in countries where individuals do not pay income tax, or where income tax is not levied on foreign workers because the project is funded by an international development agency (such as the World Bank). It can enhance the competitiveness of international tender bids by Australian organisations, as well as strengthen Australian companies’ capabilities, broaden employees’ skills, and raise the international profile of Australian industry.

In 2014-15, Austrade granted 87approvals in response to 88applications from 20applicants; this compares to 114approvals, 119applications and 24applicants in 2013-14. The overall decline in project volume is mostly due to reductions in the number of petroleum projects in the Middle East and electricity projects in Africa.

13,232 overall services provided by Austrade to Australian exporters(a)

15,185 email and phone enquiries received through Austrade Direct

1.8M+ visits to Austrade’s website

40% of visitors to Austrade’s website were from overseas

(a) This figure includes general and tailored services, sales leads, referrals and minister-led mission participation.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 39

Australian company reinvents the blood test

Atomo Diagnostics is an award-winning Australian medical technology company that develops and commercialises rapid diagnostic solutions, fundamentally changing the way that diseases can be diagnosed. The company launched in 2010 with the goal of creating a straightforward, accurate and immediate blood test.

Austrade has been working with Atomo Diagnostics on its export plans since its inception, providing market briefings and advice on local business practices across several international markets, as well as introductions to key government officials and

overseas business partners. The company believes that Australian Government support played a crucial role in the success of what was to become its AtomoRapid platform.

Seeing the opportunities to improve the accuracy of HIV testing, and following market research conducted by Austrade, Atomo Diagnostics decided to first test its AtomoRapid HIV rapid test in the South African cities of Johannesburg, Cape Town and Pretoria.

The AtomoRapid HIV integrated rapid antibody test won ‘best in show’ at the 2014 Medical Design Excellence Awards in New York, with the judges declaring that the product was ‘earth-shaking in its potentially significant impact on third-world detection of infectious disease, global public health and individual healthcare’.

Pictured: Atomo Diagnostics’ AtomoRapid platform. Austrade has worked with the company on its export strategy since 2010. Photo: Atomo Diagnostics.

Approved projects were located in the following regions:

âº Middle East—37 (43per cent) âº Indo-Pacific—36 (41per cent) âº Africa—8 (9per cent) âº Central Asia—6 (7per cent).

In 2014-15, 40 approved projects (46per cent) were commercially funded; the remaining 47 (54per cent) were funded by international development agencies.

Free trade agreement outreach

In a landmark year, the Australian Government negotiated or concluded free trade agreements (FTAs) with North Asia’s three largest economies—Korea, Japan and China. Austrade has played a crucial role in explaining the FTAs to Australia’s business community.

Austrade, with the Department of Foreign Affairs and Trade (DFAT), has delivered an Australia-wide FTA seminar series that shows how companies can take advantage of opportunities

40 Australian Trade Commission Annual Report 2014-15

provided by the China-Australia Free Trade Agreement, the Korea-Australia Free Trade Agreement and the Japan-Australia Economic Partnership Agreement.

The Hon Andrew Robb AO MP, Minister for Trade and Investment; the Hon Bruce Billson MP, Minister for Small Business; and the Hon Steven Ciobo MP, Parliamentary Secretary to the Minister for Trade and Investment, opened the seminar series, which provided briefings about the benefits of the FTAs and practical information on how to use them.

Local businesses shared their experiences, and attendees participated in an interactive panel and question-and-answer discussion with the ministers and representatives from DFAT, Austrade, TradeStart, AusIndustry and Efic.

Business representatives were also able to speak with government representatives in networking sessions and take home a ‘trade toolkit’ of relevant information, dependent on the company’s level of exporting. Early feedback from attendees has been overwhelmingly positive.

L-R: His Excellency ShinzÅ Abe, Prime Minister of Japan, and the Hon Tony Abbott MP, Prime Minister of Australia, shake hands after signing the Japan-Australia Economic Partnership Agreement at Parliament House, Canberra, in July 2014. Photo: Andrew Taylor.

Leveraging opportunities from free trade agreements

To leverage opportunities emerging from these agreements, Austrade initiated the Australian Services Framework Project, a qualitative research project that aims to identify the barriers and impediments to Australia-based legal and advisory firms across four markets—Japan, Korea, Singapore and Indonesia.

Austrade partnered with the Department of Industry and Science, the Australian Services Roundtable and Asialink Business to undertake intensive interview-based research into barriers for the four modes of service delivery by legal and advisory firms—cross-border trade (services supplied from the location of one country into the location of the consumer); consumption abroad (services supplied in the territory of the producer to the consumers of another country); commercial presence (services supplied through a business or professional establishment that has relocated to be near the consumer); and temporary movement of natural persons (services supplied by nationals of one country moving to the consumer’s country). The research outcomes will inform Austrade’s trade development strategies to assist professional services firms to access new international markets.

Austrade’s TradeStart network

In 2014-15, Austrade’s TradeStart network of 27offices operating in metropolitan and regional Australia broadened the reach of the agency’s trade and education promotion services. A tender process was finalised and new contracts commenced on 1September 2014. Partner organisations for the 2014 to 2018 period were also announced, including new partners in Canberra and Perth.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 41

Craig Malcolm TradeStart Adviser, Melbourne

Craig Malcolm is the trade adviser in Melbourne for Austrade’s TradeStart network. He is one of three advisers employed by partner organisation, the Australian Industry

Group. Craig started in his role in 2003 and is one of the longest-serving TradeStart advisers. He works with a large portfolio of exporters across diverse sectors, ranging from premium processed food to technology. ‘I work with so many different products and services and different overseas markets—I learn something new every day’, he said.

Craig has a master in international business, and uses his 20 years’ experience working in small businesses, as well as extensive knowledge and experience in Asia, to assist Australian companies to expand into international markets.

With eight new advisers having joined Austrade’s TradeStart network in 2014, Craig has been able to share his experience with his new colleagues, including mentoring them on finding unique selling propositions for clients. He said, ‘We see a lot of different exporting approaches and it’s very rewarding to advise a client on how to maximise their commercial impact’.

Jointly delivered by state, territory and local governments, industry associations and chambers of commerce, TradeStart partner organisations offer a range of assistance for exporters or potential exporters that complements Austrade’s services for export-ready businesses. Austrade’s TradeStart network provides exporters with a local contact who can help them navigate overseas markets, and provide direct access to Austrade’s overseas network.

Apart from export advice, Austrade’s TradeStart network provides insights on issues concerning regional areas, including the significant effects of seasonal or natural disaster events on Australian export capacity. TradeStart locations and partner organisations are listed in AppendixA.

Achieving high standards of service

Each year, Austrade undertakes a comprehensive Service Improvement Study to assess its service delivery and identify areas for improvement in its services to Australian businesses. The study is conducted independently and results are now delivered quarterly.

In 2014-15, the Service Improvement Study found that 89percent of Austrade’s clients were satisfied with their dealings with the agency during the past 12 months. Austrade’s net promoter score is very strong, at +33, up from +25 in the previous year. These results reflect the strong client service culture that exists within Austrade.

42 Australian Trade Commission Annual Report 2014-15

The survey also collected a range of more detailed information and feedback, including:

âº 80percent of all clients rated Austrade’s paid services as representing good value for money.

âº 80percent of all clients said Austrade made a positive contribution to their business.

âº 78percent of all clients said they achieved a commercial outcome as a result of working with Austrade.

Figure 8 shows clients’ ratings of Austrade’s services over the past five years.

Figure 8: Client ratings of Austrade’s service, 2011 to 2015

100

-20

Extremely good

Very good

Good

Poor

Neutral

2011

(n=1,001)

2012

(n=1,200)

2013

(n=1,302)

2014

(n=1,080)

2015

(n=1,112)

14 13 13 18 23

87 89 89

41 39 41 39 40

33 33 34 32 26

8 1 0 9 6 7

4 5 4

4 2

Note: Due to rounding, totals may not add up to 100percent.

In 2014, Austrade changed its survey methodology from a yearly survey to a quarterly online survey. This allows for the collection of feedback on services closer to the date they were delivered, providing more current perspectives

into Austrade’s work. It also allows for complaints to be resolved in a timelier manner, as well as supporting follow-up activities through a re-contact programme. The new methodology identifies Austrade’s service areas that clients believe will have the greatest impact on their business. In turn, this allows Austrade to tailor and improve its services to focus on activities that deliver maximum impact to businesses.

The 2015 Service Improvement Study found that the number of clients who rated Austrade’s services as extremely good or very good was at its highest level since 2008. This reflects a refinement of Austrade’s initiatives to better match Australian businesses’ capability, capacity and interest in growing sectors of global demand, as well as a renewed focus on delivering high-quality client services that are tailored to the needs of individual businesses and their objectives internationally.

During the year, Austrade also updated several service policies and procedures to help staff deliver consistent levels of service across its dispersed network. Staff can access a range of online tools to help them provide the highest quality service when working with other organisations. Service policies also reinforce service standards and support a culture of consistent business practices.

Organisations engaging with Austrade can provide formal compliments and complaints at any time. Feedback is reviewed regularly, and is used to improve service delivery in Australia and

89% of all clients were satisfied with Austrade’s services in the past year

80% of all clients rated Austrade’s paid services as good value for money

80% of organisations said Austrade made a positive contribution to their

business

78% of all clients achieved a commercial outcome by working with Austrade

Part 02 / Report on performance. Outcome 1 - Programme 1.1 43

overseas, as well as identify issues of importance to stakeholders. In 2014-15, Austrade received 39 formal complaints about its services. It also received many compliments during the year. While compliments are not consistently tracked, a sample of up to 40 compliments is provided to Austrade’s Executive each month, along with complaints. Austrade’s Service Charter can be found on www.austrade.gov.au and in this report at AppendixB.

Highlighting Australia’s export capabilities

Another core focus for Austrade is demonstrating Australia’s comparative advantages to potential overseas customers, promoting Australian suppliers as productive, efficient, sustainable and safe. Austrade has developed a library of industry capability reports as part of this work. These comprehensive reports cover the global demand trends impacting different industries and how Australian suppliers can provide solutions for global customers.

Austrade has 25industry capability reports within its library, with infrastructure finance and road safety among the 10 reportsnewly produced in the past financial year. The reports are used by Austrade, other Australian Government agencies, state and territory governments, and industry stakeholders to promote Australia’s strengths to potential customers.

Austrade also uses online technology to connect customers and exporters through the Australian Suppliers Directory, a web-based tool available at www.austrade.gov.au, to promote Australia’s high-quality products, services and solutions. This database allows customers to search through more than 6,000 Australian exporting organisations, across 17industries, by keyword, sector or company name. In 2014-15, a comprehensive review and

upgrade of the database was undertaken and around 1,000 company profiles were updated so the latest products, services and contact details of Australian exporters are available to potential customers.

Match Australia programme

The Australian Government’s international sports business programme, Match Australia, connects Australian businesses with global partners through major sporting events. Austrade, in partnership with state and territory governments, manages the programme. It is one of a range of initiatives under the Major Sporting Events Taskforce, which is managed by the Office for Sport.

Earlier in 2015, Austrade implemented a comprehensive business engagement strategy in 10countries to encourage high-level business delegations to visit Australia and take part in business networking activities during the AFCAsian Cup, Australian Open Tennis and ICCCricket World Cup. This outreach included a number of networking activities in Japan, China, Korea, the United Arab Emirates, Qatar, Jordan, India, Pakistan, Sri Lanka and South Africa.

Programmes during the tournaments attracted more than 100international investors and customers to Australia, who participated in a series of ministerial investment roundtables, individual business programmes, and state and territory trade and investment networking events. International attendees included sovereign wealth funds looking to build partnerships with Australian financial services providers; resources, energy, agribusiness and tourism firms seeking new or expanded investment opportunities in Australia; and organising committees of major international tournaments seeking information and introductions to Australian companies with world-class capability in the planning, delivery and legacy of major sporting events.

44 Australian Trade Commission Annual Report 2014-15

The Match Australia programme will be expanded from 1July 2015 and will continue to showcase Australia to international businesspeople attending major sporting events, such as the 2016 Rio de Janeiro Olympic Games.

Working with partners

Austrade works with partner organisations to build collective knowledge, networks and resources, with the common goal of contributing to Australia’s economic prosperity. Austrade’s partners include other Australian Government

departments and agencies, state and territory governments, industry associations and chambers of commerce, and industry and professional service providers. Partnering with these organisations supports Austrade’s corporate strategy, extends its reach, and results in greater outcomes for Australian businesses.

For example, during the year, Austrade formalised partnerships with industry associations such as AusBiotech and Food Innovation Australia Limited. In March 2015, Austrade worked with Austmine, the peak

Australian clean technology powers global markets

Australian solar technology company, RayGen Resources, has paved the way for the global export of utility-scale solar energy with the official opening of the world’s first concentrated solar photovoltaic (CSPV) power station in Newbridge in Victoria.

In March 2015, a memorandum of understanding was signed with China’s Juye Solar for a capital investment of $6million, enabling RayGen to boost its export manufacturing capability and increase production to 50megawatts per year. A further $15million capital injection by Juye Solar in China will increase production on the ground, and help drive sales to hundreds of megawatts. This agreement builds on the previous $60million deal ($2million

investment and $58million in sales) signed in 2014.

Austrade started working with RayGen in 2013 when the company was a finalist in the Australian Technologies Competition, which is funded by the Department of Industry and Science. Austrade invited RayGen to join the November 2013 clean technology trade mission to China, during which they were introduced to Juye Solar. This introduction resulted in the signing of the $60million investment and distribution deal to supply its leading-edge solar power generation technology into China. The signing was observed by the Hon Andrew RobbAOMP, Minister for Trade and Investment, during the Australia Week in China business mission held in April 2014. MrRobb described the agreement as a ‘tremendous example of Australian innovation finding a market in China which results in jobs, investment and trade for Australia’.

Pictured: RayGen’s 200-kilowatt CSPV facility operating at Newbridge, Victoria. Photo: RayGen.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 45

industry body for the mining equipment, technology and services (METS) sector, to deliver a mission to Cambodia and Vietnam, which resulted in agreements between Australian companies and local mine operators. Austrade arranged a comprehensive programme, including meetings with key government officials, regulators and mine site visits. Similar activities between Austrade and Austmine in New Caledonia have been positively received by Australian METS companies.

Austrade’s state and territory directors unit worked with state and territory governments to ensure a coordinated approach to the Australian Government’s trade and investment agendas. Work included delivering industry seminars, briefings and coordinated programmes for inbound buyers and investors. In 2015, the state and territory directors unit was strengthened by staff returning from overseas postings in Japan, India, Indonesia and China. Their firsthand market knowledge and experience is highly valued by partners and firms looking to develop pan-Asian market strategies.

Austrade’s overseas network can extend the international reach of state and territory governments. For example, by leveraging Austrade’s extensive network in China, the Tasmanian Government was able to achieve significant outcomes in 2014-15, including:

âº a letter of intent signed between Essential Oils of Tasmania and Beijing Gingko Group to set up a joint venture for the extraction of bioactives from Tasmanian-grown produce. This is a project with the potential to revitalise the Tasmanian blackcurrant industry

âº a memorandum of understanding between TasTAFE and China’s Chambroad Group on cooperation in education and training in the aged care and hospitality sectors

âº a contract signed between China’s Shanxi Everpride Pharmaceutical Company and the School of Medicine at the University of Tasmania on joint research of earthworm extract for use against Alzheimer’s disease

âº the commencement, in November 2014, of fruit and seafood imports from Tasmania by Yonghui Superstores, one of the largest supermarkets in China, worth $1.5million to date.

For more information on Austrade’s work across government, see page 99.

Women in Global Business programme

The Women in Global Business (WIGB) programme is another way Austrade engages with state and territory governments. This joint initiative aims to increase female participation in international trade and investment, and deliver increased economic benefits and job creation in Australia.

WIGB provides support to Australian businesswomen, allowing them to grow their businesses internationally through skills and capacity-building seminars; a mentoring programme; research on barriers experienced by women in exporting; engaging the recipient of the annual Beryl Wilson Austrade Scholarship for Women in International Business; and undertaking promotion of businesswomen at major economic development conferences around the world.

In 2014-15, there was significant outreach to the female business community through the Engaging with Developed Asia: Free Trade Agreements speaker series, which was delivered in partnership with ANZ Global Wealth in eight Australian cities, attracting more than 500attendees. Two of Austrade’s female trade

46 Australian Trade Commission Annual Report 2014-15

commissioners provided keynote presentations on their experiences in Korea and Japan.

Last year, the Government announced an Asia-Pacific Economic Cooperation (APEC) project to enhance the ability of international trade promotion agencies to connect women’s businesses to export markets. Austrade worked with the Department of Foreign Affairs and Trade to showcase WIGB as a best practice example to 11APEC nations during a three-day workshop in the Philippines in November2014.

WIGB is undertaking further engagement with trade promotion agencies across the APEC region to embed the concept and promote development of ‘sister’ programmes with similar structures and objectives. The establishment of the first WIGB international chapter in Indonesia during the year was a positive way to build the skills and capacity of Indonesian businesswomen, and to act as an additional connection between Indonesian and Australian exporters.

Joint study on women in international business

The second report from a five-year joint study by WIGB and the University of Melbourne found that Australia’s female international entrepreneurs are predominantly baby boomers who moved rapidly into international growth.

The report, entitled Women, global trade and what it takes to succeed, surveyed 416Australian businesswomen and was released in March 2015. The study found that they were quick to embrace global opportunities, with 42percent internationalising their business within a year of start-up, and 81percent doing so within the first five years.

Almost three-quarters indicated an intention to expand into even more markets and none intended to scale back their global reach. China was the most important target market for 34percent of women surveyed, up from 18percent in 2013, while 52percent ranked Asia as their number-one priority market. The full report is available at www.wigb.gov.au.

Participants at the Women in Global Business Indonesia official launch, Jakarta, March 2015. Photo: Women in Global Business.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 47

Beryl Wilson Austrade Scholarship for Women in International Business

In February 2015, the Hon Andrew RobbAOMP, Minister for Trade and Investment, announced Melbourne student Fei Li as the 2015 recipient of the Beryl Wilson Austrade Scholarship for Women in International Business. The scholarship was established last year, on the 50thanniversary of the appointment of Beryl Wilson as Australia’s first female trade commissioner, to encourage women to consider a career in international business.

The scholarship will support Fei’s completion of a Master of International Business degree at the University of Melbourne, which is part of a dual programme run by HEC MontrÃ©al, a university business school in Canada, and will see Fei also complete a Master of Global Supply Chain Management. Fei holds a double bachelor degree in commerce and economics, has a background in marketing,

speaks Mandarin and Cantonese, and can now add this scholarship to her long list of achievements.

‘I was very surprised to receive the scholarship. I am also very honoured, excited and nervous. It’s a mix of emotions. Receiving this scholarship confirms what I’m doing and the direction I’m heading in—it gives me a lot more encouragement and I’m excited for the future’, said Fei.

As part of the scholarship, Fei will also participate in Austrade’s Women in Global Business programme and undertake work experience in its Melbourne office. In acknowledging her achievements, Fei was quick to summarise the importance of Beryl Wilson’s role in paving the way for women in business. ‘Beryl Wilson’s experience motivates and encourages other women to see what opportunities and possibilities exist for them. It’s amazing to know that people can achieve what they want through hard work. It’s what you do that leads you there’, Fei said.

Pictured: Fei Li, recipient of the 2015 Beryl Wilson Austrade Scholarship for Women in International Business, with the Hon Andrew RobbAOMP, Minister for Trade and Investment, in Canberra, February 2015. Photo: Austrade.

48 Australian Trade Commission Annual Report 2014-15

Researching Australia’s internationally active businesses

Following last year’s major survey of Australian internationally active businesses, Australia’s International Business Survey2014, Austrade again collaborated with Efic, the Export Council of Australia and the University of Sydney in 2015 to produce the Australia’s International Business Survey: 2015report, which conveyed the views of 1,237 Australian businesses drawn from 19industry sectors—including 93subsectors— operating across 114international markets.

The 2015 survey confirmed one of the key findings of the first survey—that Australian internationally active businesses participate in a diverse range of complementary cross-border activities. This goes well beyond traditional exporting. About 88percent of survey respondents were involved in exporting, 50percent in importing, and 47percent in other international activities,10 including greenfield investment overseas (35per cent); cross-border mergers and acquisitions (22per cent); international research and development activities (37per cent); offshore manufacturing of products or components (25per cent); and inward investment from international investors (22per cent).

While 93percent of exporters said exporting of final goods and services directly from Australia was important or very important, about 59percent also said the same was true for exporting indirectly via foreign sales branches or subsidiaries. Participation in global value chains and relationships with multinational corporations were also important channels of international engagement. At least 50percent

of respondents said that exporting related to a supply contract with an overseas multinational corporation, or the export of intermediate goods and services into further production processes, were important to their business.

Australia’s International Business Survey 2015 also provided new insights into the market development activities of respondents. Figure9 shows that the most important activity identified by respondents to develop international business was visiting overseas customers in person. Other activities included attending overseas trade shows, using digital channels, online search marketing and advertising, social media and selling via third-party e-commerce websites, such as eBay and Alibaba.

Participants were also asked about specific barriers in overseas markets that they considered their most important and most difficult (Figure10). Consistent with the findings of the 2014 survey, 2015 respondents identified local language, culture and business practices as the most important barriers across overseas markets. The next most important barrier identified by participants was payment issues, followed by regulations that favour local firms, and the difficulties faced in understanding local regulations. With its detailed market and commercial knowledge, Austrade is uniquely able to assist Australian businesses to overcome these ‘behind the border’ barriers to trade and investment, consistent with legal obligations, including anti-bribery and corruption laws both in Australia and overseas.

10 Since most internationally active businesses were involved in more than one activity, totals sum to more than 100per cent.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 49

Looking ahead, Australian internationally active businesses were relatively optimistic about the outlook for their international business in 2015, with many citing the lower value of the Australian dollar as a key contributing factor.

They also identified their key target markets for the next two years, with the United States, China and Indonesia topping the list for future opportunities. The full report is available at www.austrade.gov.au.

Figure 9: Importance of various market development activities in earning international revenue

Visiting overseas customers in person

Growing your own international sales and markting team

Overseas promotions campaigns, directly or via an agent

Overseas trade shows

Appointing a new agent/ distributor/partner

Online search marketing and advertising

Social media

Third-party e-commerce websites

0 2 0 4 0 6 0 8 0 100

Very important

Moderately important

Percentage of survey respondents

76%

38%

34%

31%

33%

21%

14%

17% 93%

73%

70%

68%

65%

55%

47%

35%

36%

37%

32%

34%

33%

20% 26%

Source: Australia’s International Business Survey 2015.

Figure 10: Most significant barriers to doing business in overseas markets

Local language, culture and/or business practices

Regulations that favour local firms

Understanding local regulations

Licence or product standard requirements; tariffs, quotas and import duties

0 5 10 15 20 25 30

Percentage of survey respondents

Payment issues

29%

10%

Source: Australia’s International Business Survey 2015.

50 Australian Trade Commission Annual Report 2014-15

Promoting Australian education and training internationally Austrade supports Australia’s international education sector by promoting Australia as an international education and training destination and a provider of high-quality education and training services; helping to grow demand for Australian education and training; and contributing to the development of a sustainable international education sector.

Austrade works to accomplish these goals through its international education and training promotion framework. It focuses on:

âº improving perceptions of Australia’s international education and training sector through measures such as the Future Unlimited brand and providing accurate information to potential international students through the Study in Australia website

âº delivering high-quality and timely market research, intelligence and services to the international education sector through the Market Information Package website

âº identifying and qualifying opportunities for Australian international education and training providers, including cross-industry and transnational education and training opportunities, especially in Asia and other growth and emerging markets

âº executing an effective engagement strategy with offshore education agents

âº undertaking effective stakeholder engagement with key government and non-government organisations and individual institutions, both onshore and offshore.

Developing global human capital in Japan

In October 2014, Austrade and the Eiken Foundation of Japan formalised an alliance to promote studying in Australia to Japanese students and their families. It is the only such agreement that the Eiken Foundation has entered into with a foreign government agency.

The foundation administers Japan’s most widely recognised English language test, and has access to 60,000 high school teachers nationwide. It actively supports the Japanese Government’s goal of developing the nation’s stock of global human capital.

With a commitment to increasing the numbers of Japanese students studying overseas, and an ability to create platforms across Japan to market study abroad, a strategic alliance with the Eiken Foundation has significantly improved Austrade’s capacity to promote Australia’s international education and training sector in Japan.

A particular focus of the Austrade-Eiken strategic alliance is to encourage Japanese students to consider studying in Australia from a young age. Austrade has gained the backing of five state government education departments, with 533 high schools in Western Australia, New South Wales, Queensland, South Australia and Victoria now recognising Eiken Foundation qualifications.

Pictured (L-R): Leonie Muldoon, Austrade; Bruce Miller, Australia’s Ambassador to Japan; Koichi Matsukawa, Chairman, Eiken Foundation; and Mitsuo Kimura, Executive Director and Secretary-General, Eiken Foundation, at the signing of the collaboration agreement in Tokyo, October 2014. Photo: Eiken Foundation of Japan.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 51

International education operating context

Austrade’s operating context in relation to international education is discussed below, followed by examples of achievements relating to its deliverables and key performance indicators for the promotion of Australia’s international education and training sector (see tables 2 and 3 on pages 19-31).

International education sector performance

Demand for Australia’s international education sector continued to increase in 2014-15 across the higher education, vocational education and training, schools and English language sectors, following strong growth experienced in 2013-14.11 There was a 12per cent increase in enrolments and a 17per cent increase in course commencements in the previous year. This growth was reflected in the export value of the sector, which increased by $2.1billion in 2014 (Figure11).

Figure 11: Australia’s education exports, 2005 to 2014

$9.4 $10.3

$11.9

$14.3

$16.7 $16.7 $15.8 $15.1 $15.5

$17.6

Value of exports ($ billion)

2005

2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: ABS, International trade in goods and services, Australia, cat. no. 5368.0.

The sector shows strong growth prospects for 2015-16, following a 7per cent increase in international student course commencements in the first half of 2015.

Developing the Australian International Education 2025 strategy

In 2014-15, Austrade initiated a long-term market development plan for the sector called Australian International Education 2025, and embarked on a comprehensive programme of consultation with the Australian education and training sector.

Australian International Education 2025 will align with the draft National Strategy for International Education, which was launched in April 2015 by the Hon Christopher PyneMP, Minister for Education and Training. It will play a key role in the implementation of the draft strategy’s vision for the international education sector.

During April 2015, Austrade held 11consultations in nine locations around Australia, involving 800members of the education and training, government and business sectors. The consultations considered what the long-term aspiration for the sector could be and the actions that could be undertaken in individual states, territories and regions for implementation. Recommendations arising from the consultations will be considered by senior leaders from government and the education and business sectors at a roundtable expected to be convened by theHon Andrew RobbAOMP, Minister for Trade and Investment, in August2015.

Australian International Education 2025 will provide concrete steps to enable Australia to sustainably increase the supply of education and training services to international students coming to study in Australia, and to significantly increase the offshore delivery of education and training services. The plan is expected to be finalised in late 2015.

11 Department of Education and Training 2014 statistics, December.

52 Australian Trade Commission Annual Report 2014-15

Members of the education and training sector consider ideas at consultations held by Austrade to inform the Australian International Education 2025 market development plan for the sector, in Perth, April 2015. Photo: Austrade.

The internationally recognised Future Unlimited branding in use at the Australia pavilion at the China International Education Exhibition Tour in Beijing, March 2015. Photo: Austrade.

Improving perceptions of Australia’s international education sector

Austrade continued to expand the reach of the Future Unlimited brand through its brand licensing programme, with the number of Future Unlimited brand licensees increasing by 25per cent, from 315 at 30June 2014 to 394 at 30June 2015. This includes 281Australian institutions and 113overseas stakeholders and education agents.

Future Unlimited licensed Australian education and training institutions accounted for around 400,000students in the top200 international education and training providers in Australia in 2014.

Introduced in June2011, the Future Unlimited brand is now recognised internationally and is

integral to Austrade’s education activities across its global network. It is used at major events such as the Australia pavilion at the annual China International Education Exhibition Tour (one of the largest education events in China); the annual NAFSA conference (the leading international education conference in the United States and Canada); the annual conference of the European Association for International Education; and Austrade’s Future Unlimited education exhibitions around the world.

During 2014-15, Austrade streamlined processes for Future Unlimited licence renewals, making it easier for licensees and more efficient for Austrade to manage licence extensions. Updated electronic marketing collateral was also made available to licensees.

394

Future Unlimited brand licensees at 30 June 2015

400,000 overseas students enrolled in the top 200 education and training providers in

Australia in 2014

1.6M+ visitors to the Study in Australia website

85% of visitors to the Study in Australia website were from overseas

Part 02 / Report on performance. Outcome 1 - Programme 1.1 53

In addition to establishing an international brand presence for Australia’s international education sector, Austrade also administers the Studyin Australia website, www.studyinaustralia.gov.au. Endorsed by the Council of Australian Governments as the official source of information for international students, the website provides details of all courses available to international students, as well as information about studying and living in Australia.

In 2014-15, visitors to the website grew by almost 14percent to 1,650,000, with around 85per cent visiting from offshore. The website was enhanced with new content and functionality, including the ability for students to create their own personal guide to studying and living in Australia.

Social media is an essential means by which Austrade extends the reach and impact of the Study in Australia website, as well as its other student engagement activities. Sharing content, news, updates, events and student experiences through Facebook, Twitter, YouTube and Weibo has provided increased opportunity for engagement between Austrade and international students. The Study in Australia Facebook page had 202,590 likes in 2014-15, and the Study in Australia Twitter account reached 11,406 followers. There were 33,856 views of the Study in Australia YouTube channel in 2014-15.

Delivering market research and intelligence

Austrade uses its extensive offshore network to identify opportunities and market intelligence to help Australian education and training providers expand their services globally. Market intelligence, analysis and opportunities are

delivered through Austrade’s online subscriber service, the Market Information Package (MIP). In2014-15, subscriptions to the MIP service increased by 12per cent to 314.

In 2014-15, there were 518articles published on the MIP, including 249market opportunities, 165market updates, 10market snapshots, six country research reports and nine data insights. This was consistent with the number of articles published in 2013-14.

Since October 2013, the use of Twitter to publicise new MIP articles has been well received, with the number of MIP Twitter followers growing to 1,103 at 30June 2015. Austrade also publishes a free e-newsletter, MIP Weekly, which highlights the latest articles and drives traffic to the MIP website. In2014-15, the number of recipients of this e-newsletter increased by 21per cent, from 4,255 to 5,145.

During the year, Austrade continued to make enhancements to the MIP, including the addition of video content of education market insights, original research reports, market snapshots, and data and trend analysis. InAugust2014, Austrade published an original research report, called Return to growth, which focused on the growth trend for Australian international education and training during 2013-14. Return to growth was the most popular MIP data report in 2014-15, with more than 1,400page views and numerous external references.12

12 For example, the report was referenced in Alan Olsen 2014, ‘Education as an export to be $30b within six years’, Australian Financial Review, 6October.

54 Australian Trade Commission Annual Report 2014-15

hancing the education sector’s understanding of international student data trends

An important feature of the MIP is the international student data provided by the Department of Education and Training and the Department of Immigration and Border Protection. To enhance access to this often complex data and deliver greater insight on trends to the education sector, Austrade developed a data visualisation tool for MIP subscribers called MIP Orbis. This tool enables deeper analysis and visual manipulation of student enrolment and commencement data, and provides comparisons with complementary data sources, such as student visa applications and grants. Austrade identified the need for this data tool from feedback within the 2014 MIP survey, as well as subscriber consultations and website analytics.

Identifying opportunities for Australian international education and training providers

Austrade also identifies opportunities for Australian international education and training providers to increase demand, particularly through cross-industry and transnational education and training opportunities in Asia and other growth and emerging markets. These opportunities are also accessed through the MIP. Examples of successful outcomes from opportunities promoted in the MIP in 2014-15 include:

âº an opportunity for a partnership for corporate training with a banking institution in India, published in the MIP in February2015. Responses were received within hours of publication and continued over the following days, with 25percent of Australian universities responding to the opportunity

âº an opportunity for the delivery of environmental management training with the Guangdong Department of Organisation in China, published in the MIP in2014. This led to four expressions of interest and subsequently an agreement with an Australian institution in2015

âº an opportunity to deliver joint masters programmes with the Vietnam Commerce University, published in the MIP in December2013. This resulted in 11expressions of interest from Australian universities and two Australian universities signing a memorandum of understanding for the delivery of joint masters programmes in commerce and marketing

âº an opportunity for Australian education institutions to partner with institutions in China to deliver teacher training, study tours and the recruitment of English language teachers, published in the MIP in2013. This resulted in 27expressions of interest. Successful Australian institutions provided training for 454teachers in Beijing between October2013 and March2015 in preschool and high school education and also in multiple subject teaching.

314

subscribers to Austrade’s Market Information Package (MIP)

518

articles published on the MIP website

1,103

MIP Twitter followers

5,145 recipients of Austrade’s MIP Weekly e-newsletter

Part 02 / Report on performance. Outcome 1 - Programme 1.1 55

Engaging offshore education agents

Education agents, contracted by Australian education institutions, play a critical role in the recruitment of international students, as well as the promotion of Australia as a high-quality international education destination. Austrade maintains strong relationships with a wide network of education agents through its specialised agent newsletters, regular seminars, and related events held across its network of offices.

In 2014-15, Austrade produced an in-depth assessment for Australian education providers on education agent activity in the Japanese market. The Japan agent engagement report: Realising productive partnerships was compiled from survey results taken from 19Japanese education agents, from industry reports, and from discussions with agents at networking events. The publication was distributed through the MIP, and received 316page views.

Education agents also play a key role in the continuing expansion of the Future Unlimited brand. By working with reputable education agents and their associations in key markets, Austrade has been able to increase the global reach of the Future Unlimited brand through its brand licensing programme. The number of international education agents and associations licensed to use the brand increased from 122 to 144 in 2014-15, covering 61countries.

Austrade’s global education agent survey

In April 2015, Austrade conducted its first global survey of education agents engaged by Australian education institutions. The survey targeted nearly 1,000education agents who were located across 20markets. It was designed to determine the most accurate and up-to-date market intelligence about future demand for Australian education and training, and inform strategic planning for student recruitment.

Data collected from the survey will provide essential insights into global education markets, including international student trends, regional analysis, cross-market comparisons and international student intentions. This is the first time Austrade has conducted a centralised global agent survey to allow for intensive cross-market comparison.

The survey found there was a positive long-term outlook for Australia’s international education sector, with 65percent of all agents surveyed expecting strong, ongoing growth in placements to Australia in the next five years.

Engaging other education sector stakeholders

A major part of Austrade’s engagement with education stakeholders was through its work on the Australian global alumni engagement strategy. Austrade collaborated with the Department of Foreign Affairs and Trade and Australian universities to contribute to the strategy, which aims to maximise the economic and diplomatic advantages that alumni, institutions and governments can accrue from more collective engagement. The strategy is expected to be launched in the second half of 2015.

Australia’s international student alumni are estimated to total around 2.5million and play a key role in advancing Australia’s economic diplomacy. Through their success, they demonstrate the values that underpin the Future Unlimited brand for Australian education and training, and support Austrade’s work promoting Australia internationally as a destination for high-quality education and training services.

In October 2014, as part of its client engagement programme, Austrade held a transnational education roadshow, Responding to Growth, in Brisbane, Melbourne, Sydney and Perth. The

56 Australian Trade Commission Annual Report 2014-15

Brazil education mission to Australia formalises stronger bilateral relationship

In March 2015, Austrade organised a high-level Brazilian vocational education and training (VET) mission to Australia, which comprised senior representatives from the Brazilian Ministry of Education, and advisers from Brazilian VET public institutes. The mission was the result of a long-term opportunity identified by Austrade for Australian VET providers to assist in the development of Brazil’s workforce through skills and training, and to encourage stronger linkages between Australian and Brazilian VET organisations.

Brazilian delegates gained a broad overview of the VET system in Australia, including how

Australian institutions, including universities and the Commonwealth Scientific and Industrial Research Organisation (CSIRO), work with industry on applied research projects, with a view to exploring where Australia and Brazil can best collaborate and build alliances. The delegates visited federal and state government departments and agencies, industry skills councils, VET institutes, universities and research institutes, as well as Australian businesses in Canberra, Melbourne and Hobart.

The mission’s key outcomes included the signing of an updated memorandum of understanding on education and training between Australia and Brazil, and memorandums of understanding with CSIRO and TAFE Directors Australia.

Pictured: Patricia Monteiro, Austrade (third from left) and Ollie Shugg, Austrade (second from right), with Professor Paulo de Souza, Scientific Director, CSIRO Hobart (far right), and members of the Brazilian VET mission to Australia on a visit to the Marine National Facility in Hobart, March 2015. Photo: Austrade.

purpose of the roadshow was to encourage education and training providers to diversify by delivering their programmes offshore, in addition to recruiting international students to Australia.

The roadshow included presentations from Austrade staff from Latin America, Myanmar, Saudi Arabia and South Asia, highlighting opportunities for the Australian education sector to diversify source markets, regions, disciplines and delivery modes. Participants were encouraged to consider opportunities to deliver tailored training in addition to formal Australian qualifications. Follow-up activities

have included publications distributed on the Market Information Package website, such as Latin America—transnational education and A new model for VET growth in South Asia, as well as the Australia-Sichuan Aged Care and Health Vocational Education and Training Forum held in China in April 2015.

During the year, Austrade also worked closely with other Australian Government agencies, and state and territory governments, to achieve its education and training outcomes. For more information on Austrade’s work across all levels of government in Australia, see page 99.

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Attracting productive foreign direct investment to Australia As Australia’s foreign direct investment promotion agency, Austrade leads a national, whole-of-government strategy for promotion and facilitation of foreign investment into Australia. To deliver the greatest value to the Australian economy, Austrade focuses on foreign direct investment that contributes to economic prosperity through creating and retaining Australian jobs, developing new industries and infrastructure, introducing new technologies and skills, encouraging innovation and competition, raising productivity, and strengthening Australia’s overall economic linkages with the world.

In order to achieve its deliverables and key performance indicators for investment attraction, Austrade:

âº targets potential investors, including introducing them to state and territory governments

âº promotes Australia’s economic credentials and capabilities

âº promotes specific investment opportunities âº explains the market and regulatory environment âº cooperates with state and territory governments to facilitate investment

into Australia.

Within this framework, Austrade works in partnership with state and territory governments to implement strategies around five ministerially agreed national investment priorities. These priority sectors are:

âº agribusiness and food âº resources and energy âº major infrastructure âº tourism infrastructure âº advanced manufacturing, services

and technology.

Austrade’s promotion and attraction work extends across its global network, but is focused primarily in 32key markets where opportunities are greatest. Austrade also works closely with professional services firms and industry partners to win foreign investment for Australia. Figure12 is an illustration of Austrade’s investment attraction process.

Figure 12: Austrade’s investment attraction life cycle

Aftercare and reinvestment

Promotion

Policy, research and strategy

Facilitation Attraction

Investor at the heart of our work

Austrade working closely with federal partners, states and territories and the private sector

Austrade lead

Austrade working closely with states and territories

All stages cooperating closely with the Department of Foreign Affairs and Trade.

Investment operating context

Austrade’s operating context in relation to foreign direct investment is discussed on the next page, followed by examples of achievements relating to its deliverables and key performance indicators for the attraction of foreign direct investment to Australia (see tables 2 and 3 on pages 19-31).

58 Australian Trade Commission Annual Report 2014-15

Australia’s investment environment

Australia’s inward foreign direct investment (FDI) stock reached $688.4billion in 2014, double the level of 2005. The European Union (including the United Kingdom) and the United States remain dominant sources of FDI for Australia, with totals of $170billion and $163billion respectively. Major Asian nations are fast-growing sources of FDI, with China’s FDI stock recording a compound annual growth rate over the past five years of 27percent, followed by Korea at 20percent (albeit from a low base), ASEAN at 14percent and Japan at 8percent.

As a percentage of domestic GDP, FDI stock in Australia remained strong at 39percent in 2014, sharply up from 29percent of GDP in 2008. According to the United Nations Conference on Trade and Development,13 Australia’s global share of FDI, measured in USdollars, was 2.2percent in 2014, compared with a 2.1percent share six years ago. This improvement was partly due to Australian FDI growth—84percent over the six years to 2014—being stronger than the average for developed economies (61percent).

Australia’s economic resilience, together with its strategic location in the booming Asia region, strong global trade and investment ties, a proven track record of innovation, skilled labour force and an open, friendly and outward-looking business environment, continue to present strong investment opportunities for Austrade to promote and facilitate.

Australia’s economy has achieved a real GDP annual average growth rate of 3.3percent over the past 23years, and its forecast economic growth rate between 2015 and 2020 is the highest among major advanced economies.

13 United Nations Conference on Trade and Development 2015, World Investment Report 2015: Reforming international investment governance.

Australia is a global leader and important contributor to global growth in five key sectors— agribusiness, education, tourism, mining and wealth management—and ongoing demand across these sectors is expected to drive trade and investment.

Australia is also renowned globally for its innovative capabilities with world-class scientific and academic institutions, high levels of investment in research and development, modern ICT infrastructure and strong intellectual property protection.

The Australian labour force is one of the most educated, multicultural and multilingual in the world. Around 40percent of Australia’s workforce holds a tertiary qualification, and more than a quarter of Australia’s workers were born overseas.

Austrade publishes this information and other research in its various sector-based publications, the annual Why Australia—Benchmark Report and monthly investment newsletter.

Delivering investment outcomes

Austrade, along with its key partners in state and territory governments and industry sectors, contributed to 92 investment outcomes during 2014-15, with recorded capital expenditure of around $7.75billion and the creation of around 17,000jobs.

North America (United States and Canada) was the largest source of inward investment outcomes with 35 per cent of the total. This was followed by Western Europe (including the United Kingdom) with 23 per cent. Northeast Asian markets collectively accounted for 28percent of outcomes. Figure13 shows the distribution of investment outcomes assisted by Austrade in 2014-15.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 59

Among the agreed investment priority sectors, advanced manufacturing, services and technology accounted for 42 percent. The resources and energy sector accounted for 19percent, major infrastructure accounted for 17percent, tourism infrastructure accounted for 7percent, and the agribusiness and food sectors accounted for 11percent. Non-priority sectors accounted for 4percent of outcomes. Figure14 shows the industry sector distribution of investment outcomes assisted by Austrade.

To deliver investment outcomes, Austrade manages a comprehensive pipeline of qualified investors and investor leads, which are shared with state and territory governments. During 2014-15, Austrade shared 312investor leads with state and territory governments, including 91 site visits by investors.

The traditional FDI markets of North America and Western Europe continue to dominate the investment pipeline, although investor interest from China and India is growing. From an industry perspective, 94percent of qualified investor leads are within the investment priority industries—25percent in resources and energy, 16percent in agribusiness and food, 27percent in advanced manufacturing, services and technology, 8percent in tourism infrastructure and 18percent in major infrastructure.

Achieving priority milestones

Recognising the long-term nature of investment decision-making, Austrade also recorded 61investment priority milestones during the year. These tangible demonstrations of commitment to the Australian market are an important indicator of Austrade’s long-term success in promoting Australia as an investment destination.

Milestones generally provide an indication of expected future investment. In 2014-15, Austrade-supported investment milestones

Figure 13: Austrade-assisted investment outcomes by source market, 2014-15

North America 35%

Western Europe and UK

23%

Greater China(a)

(a) Includes Hong Kong and Taiwan.

17%

India

Japan

10%

ASEAN

Korea 1%

Brazil 1%

Figure 14: Austrade-assisted investment outcomes by industry sector, 2014-15

Agribusiness and food 11%

Major infrastructure 17%

Tourism infrastructure 7%

Non-priority 4%

Advanced

manufacturing,

services and

technology

42%

Resources

and energy

19%

60 Australian Trade Commission Annual Report 2014-15

included support for investors submitting bids or expressions of interest to tenders, signing non-disclosure agreements with Australian institutions and research centres, and assisting multinational companies to expand their presence in Australia.

Undertaking research projects

In 2014-15, Austrade undertooka review of Australia’s value proposition across three investment priorities—advanced manufacturing, services and technology; resources and energy; and agribusiness and food. The aim was to better promote and attract investment into these areas. The research covered global investor responses to current investment drivers and the role of Australia in those responses.

The investigation provided Austrade with a much stronger understanding of Australia’s value proposition for investors and the capacity to adjust that value proposition more quickly and accurately as investment drivers change. The research also strengthened capability within Austrade’s global network to articulate investment opportunities and win foreign investment in these sectors.

Identifying the investment pipeline

An important new programme of work for Austrade during 2014-15 was the identification of a pipeline of projects that illustrate investment opportunities available to foreign investors considering investing in Australia. Working

closely with state and territory governments and key industry stakeholders, Austrade identified and qualified 39investor-ready projects across Australia within the five investment priority sectors. These projects were distributed where appropriate, either as part of ministerial roundtables or one-on-one meetings with potential investors.

Developing capability

To further enhance capability across Austrade and its key stakeholders at Australian and state and territory government levels, in 2014-15, Austrade again provided its Winning Investment in Australia training courses in Adelaide, Melbourne and Darwin, as well as one dedicated course for NSWTrade & Investment. Additionally, an investment attraction masterclass for Austrade’s senior investment specialists and senior onshore staff was held in Sydney in May2015.

During the year, Austrade developed a comprehensive investment capability development strategy for its employees to ensure they had access to training and development opportunities that would enhance their knowledge, skills and expertise. A key element of the strategy was sector-based workshops, held in May and June 2015. These workshops brought together key investment managers from across Austrade’s network to enhance their understanding of Australia’s capability, regulatory environment, market entry models and investment opportunities.

92 investment outcomes delivered by Austrade and its

partners

$7.75B in reported capital expenditure generated from investment outcomes

17,000 jobs created as a result of investment outcomes

61 investment milestones recorded

312 investment leads shared with state and territory

governments

Part 02 / Report on performance. Outcome 1 - Programme 1.1 61

Promoting investment in Australia

In July 2014, Austrade organised the Australian Investment Forum in Sydney, bringing together more than 100leading executives from around 15investment markets, to consider the benefits and barriers to investing in Australia. The forum included four investment roundtables and was jointly hosted by the Hon Andrew RobbAOMP, Minister for Trade and Investment; the Hon Joe HockeyMP, Treasurer; the Hon Ian MacfarlaneMP, Minister for Industry and Science; the Hon Barnaby JoyceMP, Minister

for Agriculture; and the Hon Jamie BriggsMP, Assistant Minister for Infrastructure and Regional Development.

The forum provided significant insights into what drives foreign investors’ decisions and concerns. It also strengthened Australia’s ‘open for business’ message to potential investors. Austrade’s engagement with invited organisations before and after the forum contributed to 14 of the outcomes achieved with a total investment value of around $2 billion and 11 priority milestones.

Austrade assists infrastructure investment from Europe

Austrade assisted a significant investment by Italy’s Salini Impregilo, a global construction firm. The company was awarded the contract for the design and construction of the skytrain bridge and related civil works that represent one of the main sections of Sydney Metro Northwest (formerly the North West Rail Link).

Since 2011, Austrade has provided Salini Impregilo with in-depth information about the infrastructure market and project pipeline in Australia. Austrade has supported numerous site visits with high-level introductions to government and private sector stakeholders.

In October 2014, Austrade facilitated a private meeting between Cav.Pietro Salini,

CEO of Salini Impregilo, and the Hon Julie BishopMP, Minister for Foreign Affairs, in Milan. In November2014, Matteo Renzi, Prime Minister of Italy, visited the skytrain bridge site with the Hon Mike BairdMP, Premier of New South Wales, and the Hon Gladys BerejiklianMP, the then NSW Minister for Transport. Austrade supported this visit in partnership with the NSW Government.

Salini Impregilo has also been tendering for a number of other major projects in Australia. The company regularly seeks Austrade’s insights in Italy and Australia to evaluate the best options for its ongoing expansion in Australia.

In 2014, the group’s annual turnover was â¬4.2billion, an increase of 10.7per cent on 2013. Its order backlog is more than â¬32.4billion, and more than 80per cent of revenues are generated abroad.

Pictured: Cav. Pietro Salini, CEO, Salini Impregilo, and the Hon Julie BishopMP, Minister for Foreign Affairs, in Milan, October 2014. Photo: Giorgio Vianini.

62 Australian Trade Commission Annual Report 2014-15

Ministers from state and territory governments also attended the forum, including the Hon Louise AsherMP, Victoria’s Minister for Tourism; the Hon Matthew GroomMP, Tasmania’s Minister for State Growth; the Hon Martin Hamilton-SmithMP, South Australia’s Minister for Trade and Investment; and the Hon Dominic PerrottetMP, NSW Minister for Finance and Services. Feedback from industry participants was very positive and Austrade continues to engage with attendees.

In September 2014, Austrade collaborated with state and territory governments to deliver a whole-of-government presence at the International Mining and Resources Conference

in Melbourne, through which Austrade engaged with five investors who had strong interests in Australia.

Also in September 2014, Austrade worked w ith Dairy Australia and the Victorian, South

Australian and Tasmanian governments to provide a joint presence at the International Dairy Investment Forum in Melbourne. Austrade identified 12investors with strong interests in Australia. Following this event, Austrade again worked with Dairy Australia to develop aBuilding Dairy Investment Coordination workshop hosted by Dairy Australia, also in Melbourne, in February2015. The workshop was attended by 30industry participants, and delivered insights from state and territory stakeholders on trends and developments in the dairy sector.

In December 2014, Austrade hosted a high-level visit to Australia by the China Entrepreneur Club, whose exclusive membership includes China’s leading privately owned companies. This visit allowed Austrade to demonstrate Australia’s strengths as an investment destination, and highlight key investment opportunities. It included a tour of the Barangaroo development site in Sydney.

In January 2015, the Austrade-organised Australia Business Week in India included two investment programmes on innovation and resources and energy. Sixty-three delegates from Australia’s resources and energy sector presented a range of investment opportunities to India’s top private and public sector energy and steel producers. Separate roundtables and boardroom briefings, involving 37Australian delegates, discussed business opportunities in Australian research and innovation with groups such as Tata, Tata Consultancy Services, Mahindra, Aditya Birla and Motherson. For more information on the Australia Business Week in India, see page 84.

Australia Unlimited branding was used to consolidate a joint presence when Austrade worked with state and territory governments and industry stakeholders at the International Dairy Investment Forum in Melbourne in September 2014. Photo: Dairy Australia.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 63

Investor roundtables were also held as part of the Match Australia programme in early 2015, including a roundtable hosted by MrRobb in January, coinciding with the Australian Open Tennis quarter final. This roundtable included eight VIP investors from five companies from Korea, Japan, China and the United Kingdom, and focused on infrastructure, tourism, and agribusiness and food investment priorities.

Coinciding with the AFC Asian Cup final on 31January 2015, MrRobb also hosted an investor roundtable with 20VIP investors from 12companies, primarily from Gulf Cooperation Council countries, as well as two from China. The roundtable focused on the resources and energy, tourism, agribusiness and food, and major infrastructure investment priorities. In February2015, MrRobb hosted another roundtable, this time with Indian investors at the ICC Cricket World Cup. MrRobb hosted a total of 29investor roundtables in 10countries throughout 2014-15.

In June 2015, Austrade led a significant cross-government presence at the World Gas Conference in Paris. As a key sponsor of the event, Austrade, in collaboration with the Department of Foreign Affairs and Trade, the Department of Industry and Science, the Queensland Government and the LNG18 Conference, undertook a range of initiatives to demonstrate Australia’s competitive advantages as an oil and gas investment destination. The Hon Julie BishopMP, Minister for Foreign Affairs, Austrade’s Senior Trade Commissioner, Frankfurt, and Austrade’s Senior Investment Specialist for Resources and Energy engaged with important decision-makers from companies identified as potential investors, as well as those that have already invested in Australia, and are considering future projects.

Representatives from the China Entrepreneur Club visit the Barangaroo site in Sydney in December 2014. Photo: Austrade.

Advancing the investment proposition in Northern Australia

The Government is committed to the development of Northern Australia to capitalise on its close proximity to the booming economies of North Asia and Southeast Asia, and the rapidly developing economies of the tropics.

The Government’s White Paper on Developing Northern Australia has a strong focus on creating the right conditions for private sector investment, innovation, enterprise growth and business formation. Austrade played a key role in the development of the white paper, using its global networks and expertise to bring an investor’s perspective to developing policy on the north as a trade and investment gateway. Austrade also seconded a senior team member from its investment division to the white paper taskforce to provide business and commercial insights.

During 2014-15, Austrade began developing the Northern Australia Investment Forum, a showcase for investment opportunities in Northern Australia. The forum, taking place in November 2015, will be an invitation-only event to highlight investment opportunities across Northern Australia to key global investors. Work on the forum, with the governments of Queensland, the Northern Territory and Western

64 Australian Trade Commission Annual Report 2014-15

Austrade assists Japan-Australia health research partnership

Japan’s largest pharmaceutical company, Takeda, and Australia’s Monash University have formed a strategic research alliance to develop new medicines for the treatment of gastrointestinal diseases and disorders.

The research programme will build on work already undertaken by the Monash Institute of Pharmaceutical Sciences to better understand gastrointestinal disorders, potentially leading to powerful new therapies. The institute’s expertise in nanomedicine will be used to deliver drugs to the source of disease within the body. Funding from Takeda will enable scientists from both partners to collaboratively research the mechanisms

that underlie gastrointestinal diseases and develop new, highly innovative approaches to their treatment.

The research partnership reflects more than four years of engagement with Takeda by Austrade in Japan and Australia, including support for a number of site visits, and introductions to state governments, Australian research institutes and biotechnology industry contacts.

Dr Tetsuyuki Maruyama, General Manager, Pharmaceutical Research Division, Takeda, said the company’s drug discovery unit is highly specialised and ‘is actively seeking to leverage the best scientific and pharmaceutical expertise all over the world’. Takeda was particularly impressed by the Monash team, which has a proven track record for collaborative delivery of clinical candidates.

Pictured: Scientists at Takeda working on the development of new medicines. Photo: Takeda.

Australia, has proceeded in parallel with the development of the white paper. InJune 2015, the Government released the Northern Australia: Emerging opportunities in an advanced economy report that demonstrates the breadth of opportunities available to potential investors from across the world who are keen to develop links with integrating Asian and tropical markets.

Recently negotiated free trade agreements with Ch ina, Korea and Japan, existing free trade

arrangements with Singapore, Thailand, Malaysia and ASEAN as a whole, ongoing negotiations with India and Indonesia, and regional

agreements like the Trans-Pacific Partnership, offer Australia the opportunity to take advantage of Northern Australia’s untapped potential to integrate with the Asian and tropical economies.

Austrade continues to develop a dynamic pipeline of investment opportunities for Northern Australia.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 65

Austrade’s senior investment specialists

Since July 2014, five senior investment specialists have been appointed to Austrade from the private sector to add to Australia’s capacity to attract foreign investment. Each specialist brings deal-making and facilitation experience, as well as deep expertise in their respective sectors that aligns with the five investment priorities. The specialists work hand in hand with Austrade’s domestic and overseas networks, as well as state and territory governments, to win productive foreign direct investment for Australia.

Notable achievements by the senior investment sp ecialists during 2014-15 included:

âº facilitation support for the $1.45billion acquisition of Primo by JBS

âº proactive promotion of the infrastructure asset recycling initiative

âº a roundtable of key interested parties on international medicines

âº capability mapping and identification of investment opportunities in Northern Australia, particularly in resources and agribusiness

âº capability mapping and identification of investment opportunities in the life sciences, particularly in infectious and tropical diseases.

TonyEyres

Senior Investment Specialist Resources and energy

Tony Eyres has a strong background in global capital markets, covering investment banking, capital raising and advisory roles to corporate and government clients. He has engaged with investors across Asia, the United States and Europe, including large institutional investors, such as pension funds, specialist private equity firms and high-net-worth individuals.

Immediately prior to joining Austrade, Tony was an executive director with UBS Global Asset Management in Sydney. This followed 20years working in and alongside corporate and financial entities, non-government organisations and government agencies in Australia, and in New Zealand with Fonterra, a global fast-moving consumer goods company.

Tony has a Bachelor of Science (Agriculture) from the University of Western Australia and was awarded a Churchill Fellowship for travel to the United States, the United Kingdom and Europe in2000. He maintains a passion for rural and regional Australia, and an understanding of the importance of investment, including in infrastructure, to generate growth and employment.

Tony brings to Austrade a strong strategic acuity, an impressive depth of knowledge of industry supply chains and a strong alignment with the Government’s investment agenda. At Austrade, Tony is focused on the resources and energy sectors.

66 Australian Trade Commission Annual Report 2014-15

Paul Field

Senior Investment Specialist Advanced manufacturing, services and technology

Paul Field has an extensive background in the life sciences industry, having facilitated commercial deals in areas such as novel therapeutics, biomarkers, medical devices and other technologies developed by Australian biotechnology companies and research institutions. At Austrade, he is focused on attracting investment in advanced manufacturing, services and technology.

Previously, Paul was Executive Chairman at Bio-Link Australia; CEO of Bio-Link Partners Limited; Biotechnology Director at the Australian Technology Park; Commercialisation Manager at the University of Technology, Sydney; and Marketing Manager for Cellabs Pty Ltd, an Australian immunodiagnostics company, which included a posting to Munich. He is currently a non-executive director of the Cooperative Research Centre for Living with Autism Spectrum Disorders (Autism CRC), and was, until recently, a non-executive director of the ANZ Breast Cancer Trials Group Limited.

David Watson

Senior Investment Specialist Agribusiness and food

David Watson is an experienced food industry executive. He has worked in senior executive roles at MarsInc. in Dubai, where he held a regional role for Africa, India and the Middle East; and more recently at MarsInc.’s head office in WashingtonDC, where he was part of the management team responsible for the chocolate division globally. In those roles, David was actively involved in investment decisions, so he understands the investment drivers for a global food company. At Austrade, he is fittingly focused on attracting investment in agribusiness and food.

David holds Master of Law, Bachelor of Law and Bachelor of Arts degrees from the University of Sydney. In his legal career, David was a partner at law firm Minter Ellison in its New York and Sydney offices, where he specialised in cross-border mergers and acquisitions.

David’s board experience includes roles as a non-executive director at Serco Asia Pacific, a director of Mars Superannuation, Chairman of Mars Australia, and a director of the Australian Food and Grocery Council.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 67

Hugh Funder

Senior Investment Specialist Major infrastructure

Hugh Funder holds a Master of Business Administration from Sciences Po in Paris, a Master of Public Policy from Georgetown University, and a Bachelor of Arts from the University of Melbourne. He brings a depth of knowledge and experience in state government policy, particularly public-private partnerships. Hugh comes to Austrade from Lend Lease Engineering, where he was Manager of Business Development.

Earlier in his career, Hugh held structured finance and infrastructure advisory roles at ABN AMRO and Royal Bank of Scotland, where he worked to inform potential investors of market possibilities. He has also been chief of staff to two federal ministers and a state minister. At Austrade, Hugh is focused on attracting investment in major economic and social infrastructure.

Karen Wales

Senior Investment Specialist Tourism infrastructure

Karen Wales has more than 20years’ experience in the hotel and tourism industry, with extensive knowledge of the Asia-Pacific hotel investment market. Immediately prior to joining Austrade, Karen was Executive Vice President, Research and Consulting for Jones Lang LaSalle. In this role, Karen oversaw the Asia-Pacific research business and provided consultancy services to the Pacific hotel market. She was previously a hotel financial consultant with Dransfield Hotels and Resorts and was involved in the acquisition, development and asset management of hotel resort management businesses across Australia.

Karen holds a Master of Business Administration from the Australian Graduate School of Management, University of New South Wales, and a Bachelor of Combined Studies from Newcastle University in the United Kingdom (majoring in history and politics). This wealth of experience is instrumental in her role at Austrade, where she is focused on attracting offshore investment in tourism infrastructure.

68 Australian Trade Commission Annual Report 2014-15

Strengthening Australia’s tourism industry Austrade’s role in strengthening Australia’s tourism industry is to develop policy, manage programmes and provide research to grow Australia’s tourism market share. Austrade’s tourism and investment divisions work together with Tourism Australia to promote, attract and facilitate foreign direct investment into tourism infrastructure. Austrade aims to influence key policy decision-makers to create an environment that supports investment, enhanced productivity and sustainable growth in the visitor economy.

Austrade works with other areas of the Australian Government to facilitate improvements in policy settings that impact on the tourism sector, including immigration, transport, employment and the business environment. This allows tourism businesses to prosper and grow. Austrade also works with state and territory tourism organisations, in collaboration with the Australian tourism industry, to develop and implement the Tourism2020 strategy.

Accurate and timely data and research are important tools for measuring the performance of the tourism sector and its contribution to the Australian economy, monitoring tourism trends, and informing decision-making by governments and industry. Through national surveys and analytical research, Tourism Research Australia (TRA) delivers independent high-quality data and analysis on international and domestic tourism. TRA provides all levels of government

and industry stakeholders with information to help underpin tourism policy and planning and strengthen investment, marketing and business decisions.

Tourism operating context

Austrade’s operating context in relation to tourism is discussed below, followed by examples of achievements relating to its deliverables and key performance indicators for strengthening Australia’s tourism industry (see tables 2 and 3 on pages 19-31).

Tourism sector performance

International visitors to Australia spent a record $32.5billion in the year ending March 2015—10per cent or $2.9billion more than the previous year (Figure15). There was also strong growth of 8per cent in the number of visitors aged 15years and over, and 7per cent for nights spent in Australia.

Across Australia’s top five markets, China continues to lead growth. China’s trip spend increased by 25per cent to $6.4billion. China now accounts for 20per cent of all trip spend by international visitors to Australia—up from 7percent 10 years ago. Visitor numbers and nights from China have also increased significantly, both up 19per cent to 829,000 and 36million nights respectively.

Figure 15: International visitors in Australia, year ending March 2015

EXPENDITURE(a) â²10%

$32.5 BILLION

VISITORS â²8%

6.5 MILLION NIGHTS â²7% 231 MILLION EXPENDITURE(a) â²10%

$32.5 BILLION

(a) All expenditure by international visitors when travelling to Australia. Includes international pre-paid airfares and packages.

Source: TRA, International visitors in Australia, at http://tra.gov.au/documents/ivs/IVS_one_pager_March2015_FINAL.PDF.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 69

Visitor numbers and spend were also up for most other key markets. These markets include the United States, where visitors were up 10percent to 535,000 and spend up 14percent to $2.9billion; New Zealand, where visitors were up 5per cent to 1.1million and spend up 7percent to $2.5billion; and Singapore, where visitors were up 6per cent to 325,000 and spend up 8per cent to $1.2billion. Results for the United Kingdom, however, remain flat with visitors (631,000) and spend ($3.5billion) unchanged.

Across all markets, the largest growth occurred for India. Boosted by the ICC Cricket World Cup held in Australia and New Zealand during February and March 2015, trip spend was up 35per cent to $959million, visitor numbers were up 25per cent to 202,000, and nights were up 30per cent to 12million.

The increase in visitor numbers during the year ending March 2015 continued to be led by

leisure travel, which is made up of those visiting friends and relatives and holiday visitors. Those visiting friends and relatives increased by 10percent to 1.8million and their total trip spend increased by 13per cent to $5.4billion. Holiday visitors were up by 7per cent to 2.9million and their total trip spend also grew by 7per cent to reach $12.7billion.

With growth in leisure travel and across both emerging and traditional markets, most states had record visitor arrivals (Figure16).

Domestic travel accounts for around three-quarters of total visitor expenditure. Latest data from the National Visitor Survey for the year ending March 2015 show that Australians spent a record $74.1billion on travel within Australia— an increase of 5per cent on the previous year.

Growth was strong for domestic overnight travel. Overnight trips increased 6per cent to 82.3million and overnight expenditure grew

Figure 16: Visitor numbers and spend by state and territory, year ending March 2015

288,870 VISITORS 9% $472 MILLION SPEND 18% â¶ â¶

833,073 VISITORS 7% $2,384 MILLION SPEND 7% â¶ â¶

380,830 VISITORS 1% $690 MILLION SPEND 7%

â¶ â¶

2,230,933 VISITORS 12% $5,450 MILLION SPEND 14% â¶ â¶

2,196,434 VISITORS 7% $4,400 MILLION SPEND 11% â¶ â¶

3,272,578 VISITORS 7% $7,461 MILLION SPEND 9% â¶ â¶

177,065 VISITORS 2% $360 MILLION SPEND 1%

â¶

197,561 VISITORS 28% $304 MILLION SPEND 42% â¶ â¶

Note: All percentage changes are as compared to year ending March 2014. Source: TRA, International visitors in Australia, at http://tra.gov.au/documents/ivs/IVS_one_pager_March2015_FINAL.PDF.

70 Australian Trade Commission Annual Report 2014-15

6per cent to $55.7billion (Figure17). Furthermore, domestic day-trip expenditure increased by 1per cent to $18.1billion. The continuing lower value of the Australian dollar is likely to encourage greater domestic holiday numbers as overseas travel becomes more expensive.

Investment in Australia’s tourism industry

Ongoing investment in critical tourism infrastructure—including for the accommodation, aviation, and arts, recreation and business services sectors—is crucial to industry growth and will ensure that the industry remains globally competitive. Solid growth in both the volume and value of projects in the pipeline in 2014, compared to 2013, was boosted by investors’ continued confidence in the Australian tourism industry and the opportunities it presents, and also by the strength of the current development cycle.

TRA estimated that the tourism investment pipeline (from planning to completion) included 168projects valued at $53.7billion in 2014 (Figure18). This was up by 29projects and $4.3billion on the previous year, with investment in stand-alone accommodation projects potentially adding 15,915new rooms to accommodation supply.

Strong growth also occurred in mixed-use developments—valued at $33.6billion (up $11.9billion). These types of developments include accommodation components as well as other residential, commercial, recreational or gaming components. The accommodation components of these types of developments have the potential to generate a total of around 18,315new rooms, separate to those from stand-alone accommodation developments.

The Tourism2020 Implementation Plan (2015-2020)

In 2014-15, Austrade worked with Tourism Australia, the Department of Foreign Affairs and Trade, state and territory tourism organisations and the tourism industry to develop and implement the next phase of the Tourism2020 strategy.

Tourism ministers from the Australian and state and territory governments have identified four policy priorities under Tourism2020. These are to:

âº encourage high-quality tourism experiences, including Indigenous tourism

âº limit the tax, red tape and other regulatory burden industry faces

âº undertake coordinated and effective marketing campaigns to drive demand

âº work with industry to support the development of tourism infrastructure that can drive demand.

Figure 17: Domestic travel in Australia, year ending March 2015

TRIP SPEND â²6%

$55.7 BILLION OVERNIGHT TRIPS â²6% 82.3 MILLION NIGHTS â²9%

312 MILLION

Source: TRA, Travel by Australians, at http://tra.gov.au/documents/nvs/NVS_Summary_March_2015.pdf.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 71

Figure 18: Australian tourism investment pipeline, 2014

COMPLETED 21 Value: $1.5bACCOMMODATION PROJECTS

$1.3b

$3.9b

â¶

CONTINUING

32 Value: $12.2b

71 Value: $10.9b

14 Value: $1.2b 35 Value: $28.1b

STILL IN PLANNING/ UNDER CONSIDERATION

PROGRESS FROM PLANNING TO COMMITTED

REMAIN COMMITTED/ UNDER CONSTRUCTION

NEW

â¶

$6.9b 23 PROJECTS

$3.9b

5 PROJECTS

$421 MILLION 4 PROJECTS

$1.5b

9 PROJECTS $5.2b

7 PROJECTS

â¶

â¶â¶

â¶

AUSTRALIAN TOURISM INVESTMENT PIPELINE 2014

$53.7bTOTAL VALUE OF PIPELINE 29 PROJECTS 168 PROJECTS (a)

} â¶

â¶

$4.3b

ARTS, RECREATION AND BUSINESS SERVICES

ACCOMMODATION

$31.3b $1.8b

$5.0b

$1.1b

$13.9b

$8.5b

â¶

â¶ â¶

AVIATION INFRASTRUCTURE AND FLEET

INFRASTRUCTURE PROJECTS $10.9b $4.1b + FLEET INVESTMENT $20.4b $5.9b

13 PROJECTS AND 182 FLEET ORDERS(b)

57 PROJECTS

88 PROJECTS 15,915 ROOMS 3,890 ROOMS

AVIATION PROJECTS Value: $640 MILLION

ARTS, RECREATION AND BUSINESS SERVICES PROJECTS Value: $936 MILLION

MIXED-USE ACCOMMODATION

69 PROJECTS 18,315 ROOMS 9,710 ROOMS $11.9b $33.6b â¶

â¶

5 OF THE 168 PROJECTS IN THE PIPELINE WERE ACCOUNTED FOR IN BOTH THE 71 NEW PROJECTS, AS WELL AS THE 21 PROJECTS THAT WERE COMPLETED IN 2014.

(a) The size and value of the total tourism investment pipeline includes 21accommodation projects worth $1.5billion that were completed in 2014. The total pipeline does not account for the remaining 10aviation and arts, recreation and business services projects worth $1.6billion that were also completed in 2014. This is due to benchmarking the progress of the Tourism2020 accommodation rooms target.

(b) The 182aircraft fleet currently on order in the pipeline are spread across 10 separate orders by Australian airlines.

Note: All changes are as compared to 2013.

Source: TRA, Tourism Investment Monitor 2015, May, at www.tra.gov.au.

72 Australian Trade Commission Annual Report 2014-15

A programme of activities under the Tourism2020 Implementation Plan (2015-2020) was endorsed at the Tourism Ministers’ Meeting in October 2014. Australian, state and territory governments and tourism industry stakeholders agreed to work together to deliver several key reforms consistent with the four policy priorities. In April 2015, at the Australian Standing Committee on Tourism meeting, several reforms were recommended. They are to:

âº increase cross-portfolio collaboration within all levels of Australian government to plan and drive reform of the visitor economy

âº improve visa arrangements to make Australia’s visitor visas easier, quicker and competitive

âº improve aviation capacity and customer experience to improve access and flexibility to meet demand in the tourism transport environment

âº develop a skilled tourism workforce to better service the visitor economy

âº integrate national and state tourism plans into regional development and local government planning to generate effective infrastructure to service regional communities and provide services to the visitors, and to encourage private investment in tourism infrastructure

âº identify partnerships, efficiencies and opportunities to increase marketing spend to drive demand for travel to Australia and improve conversion.

In line with these reforms, the following targets have been set:

âº overnight visitor expenditure—achieve $115billion to $140billion in overnight spend by the year 2020

âº aviation seat capacity—achieve an additional 3.1million inbound international seats to reach the targets under Tourism2020

âº employment—address the predicted 56,000unfilled jobs gap

âº investment—provide up to 20,000 new rooms.

Austrade is responsible for influencing relevant agencies to improve visa arrangements, increase aviation capacity, and attract investment into tourism infrastructure.

Improving tourism access

During 2014-15, Austrade cooperated with other government agencies and tourism industry stakeholders to enhance tourism access, including through streamlining visa and passenger facilitation arrangements, and improving air services and aviation connectivity.

Streamlining visa and passenger facilitation arrangements

Austrade supported the Department of Immigration and Border Protection’s work to streamline Australia’s visitor visa processes, influencing policy outcomes to ensure there are benefits for the visitor economy. Recent significant improvements include a trial of online visitor visa lodgement for Chinese and Indian nationals. Austrade was also involved in working on the White Paper on Developing Northern Australia, which announced a number of important visa reforms, including trials to allow visa applications in simplified Chinese, fast-tracked processing, and a multiple entry visitor visa valid for 10 years for Chinese tourists.

In September 2014, the governments of Australia and New Zealand announced a trans-Tasman visa arrangement that allowed international visitors attending the 2015 Cricket World Cup to be granted entry to both Australia and New Zealand on the one visa application. This was the first time the two countries had cooperated on trans-Tasman visa arrangements.

Part 02 / Report on performance. Outcome 1 - Programme 1.1 73

Austrade supported the Australian Customs and Border Protection Service’s work to improve the experience for international passengers entering and exiting Australia. SmartGate technology provides a secure, efficient way for eligible passengers to clear passport control and is permanently available to eligible travellers from New Zealand, the United States, the United Kingdom, Switzerland and Singapore (which received permanent access in July 2014). Earlier in 2015, Customs and Border Protection commenced SmartGate trials for eligible visitors from China, Hong Kong, Macau, Taiwan and Japan. This is in addition to the existing trials for Ireland and Canada. Austrade will work with Customs and Border Protection to ensure SmartGate eligibility is expanded to further markets and introduced for departing passengers.

Improving air services and aviation connectivity

Austrade worked with the Department of Infrastructure and Regional Development to strategically influence outcomes that support a stronger, internationally competitive and sustainable transport system. This in turn supports competition, engenders consumer confidence, and provides traveller choice.

Austrade is a delegation member for international air services arrangement negotiations and ensures that tourism and trade interests are appropriately considered. In 2014-15, Austrade participated in talks with China and the Philippines. Significant capacity increases were achieved with both countries, which will assist in reaching the aviation targets under Tourism2020. Austrade also participated in talks with Hong Kong and provided input for negotiations with Chile and Myanmar.

For the year ended February 2015, international carriers operated 22.1million seats into Australian ports. This was up from 21.4million seats for the previous year to February—an increase of around 3.9percent.

In November 2014, Austrade participated in the International Civil Aviation Organization Air Services Negotiation Event (ICAN 2014) in Bali, Indonesia. The Australian delegation held more than 20meetings with foreign aeronautical authorities. Importantly, Australia’s delegation had positive interactions with representatives from Qatar, China and Malaysia—three of the tourism industry’s important visitor markets or aviation hubs.

Attracting investment into tourism infrastructure

Austrade provides coordinated government assistance to promote, attract and facilitate productive foreign direct investment into tourism infrastructure in Australia, partnering with Tourism Australia and state and territory governments. This activity includes identifying and engaging with potential foreign investors via meetings and other events.

In line with the Government’s red tape reduction agenda, Austrade works closely with Australian, state and territory government agencies to foster a supportive and streamlined regulatory environment for tourism investment. This work is supported by the Investment Attraction Partnership Group (comprising representatives from Commonwealth and all state and territory government agencies), which meets regularly to discuss opportunities for regulatory reform that supports tourism investment. The pursuit of regulatory reform is important to ensure that Australia remains competitive, not just in terms of attracting visitation, but in attracting investment in accommodation and attractions to meet the needs and expectations of visitors.

74 Australian Trade Commission Annual Report 2014-15

Wanda to invest $1.2billion in prime Sydney tourism precinct

The Wanda Group is China’s largest five-star hotel owner and manager. During 2014-15, it announced an almost $1.2billion investment in a major mixed-use development at Circular Quay in Sydney. The development, which is a major win for tourism infrastructure in Australia,

will include a new 160-room, five-star Wanda Vista hotel and renovation of one of Australia’s paramount tourism precincts.

The Wanda Group identified Australia as a priority market after participating in an investment roundtable during Australia Week in China, coordinated by Austrade in April2014. Austrade continued to work closely with Wanda during the following year, introducing a range of different investment opportunities to the company.

The development follows Wanda’s purchase of Gold Fields House at 1Alfred Street and the adjacent Fairfax House, both in Sydney, and its Jewel Project—a US$900million investment in a three-tower, five-star hotel and apartment complex in Surfers Paradise, Queensland, announced in October 2014. The Jewel development includes a 170-room five-star Wanda hotel, which will cover 146,000square metres on absolute beachfront. It is due for completion in 2018.

Pictured: Artist’s impression of the Jewel project in Surfer’s Paradise, Queensland. Photo: Wanda Group.

The Australian Tourism Investment Attraction Partnership is a five-year agreement between Austrade and Tourism Australia. The partnership sets out a whole-of-government approach for attracting foreign investment to the tourism industry, as well as promoting tourism investment opportunities to potential investors through Austrade’s onshore and offshore network.

Austrade also supports the tourism industry through the Tourism Major Project Facilitation service, which assists proponents of major tourism projects to obtain government approvals. State and territory governments also provide tourism investment facilitation services. In 2014, Austrade provided assistance to five major tourism projects, progressing more than $2billion of development that will support 12,000jobs.

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Engaging with tourism industry decision-makers and stakeholders

Austrade works cooperatively with other Australian Government agencies, state and territory governments and the tourism industry to increase participation in and implementation of the Tourism2020 strategy. This involves influencing decisions by other Australian Government agencies that support the achievement of outcomes under the Tourism2020 strategy.

This work includes providing policy advice to the G overnment to remove barriers and encourage

investment in tourism infrastructure and the supply of services to tourists. These services include transport (such as aviation and cruise shipping), visas, labour and skills, building and planning regulations, and other barriers to investment and ongoing productivity of the sector.

The tourism sector is represented by four peak industry groups—the National Tourism Alliance, the Tourism and Transport Forum, the Australian Tourism Export Council and the Australian Regional Tourism Network. During the year, Austrade consulted more than 160industry leaders to identify potential reform areas that were prioritised by governments and representatives of the four industry groups. These areas were then put forward for consideration by tourism ministers, to form the basis of reforms under the Tourism2020 Implementation Plan (2015-2020).

Australian Standing Committee on Tourism

Austrade and state and territory government tourism officials met twice in 2014-15 at the Australian Standing Committee on Tourism (ASCOT). The aim of ASCOT is to support the Tourism Ministers’ Meetings, drive the

implementation of the Tourism 2020 strategy, and consider tourism policy matters of mutual interest. Industry stakeholders from the Tourism and Transport Forum, the National Tourism Alliance, the Australian Regional Tourism Network and the Australian Tourism Export Council were invited to participate on relevant agenda items.

ASCOT supported the continuation of the Survey of Tourist Accommodation in 2014-15; advanced the Tourism2020 key reforms for tourism ministers’ endorsement; and established the funding framework for the Tourism Demand-Driver Infrastructure programme.

Business events roundtable and industry presentations

In March 2015, Austrade participated in the Business Events Roundtable, which brought the business events industry together to discuss how Australian Government agencies, including Tourism Australia and Austrade, can work together to support the industry when it is bidding for, marketing or leveraging an international event.

Throughout the year, Austrade gave several industry presentations about the Tourism2020 key reforms, achievements in 2014-15 and upcoming milestones under Tourism2020. Presentations were made at a number of events, including the Tourism and Transport Forum, Tourism Australia industry briefings and the National Tourism Alliance’s Australian Tourism Roundtable.

In November 2014, Austrade gave a presentation on subnational statistics at the OECD Global Forum on Tourism Statistics in Japan. This activity also included engagement with investors and research agencies through Austrade’s Osaka and Tokyo offices.

76 Australian Trade Commission Annual Report 2014-15

DanielBoyer AssistantGeneralManager, TourismPolicyandOperations,Canberra

Daniel Boyer and his team work closely with Australian, state and territory government agencies to develop policy that strengthens the Australian tourism industry. The team is

particularly focused on supply-side factors like visas, aviation and planning regimes and has excellent relationships across government, which are integral to its success.

As well as this policy leadership role, Daniel’s team also manages a range of tourism-related programmes, like the Approved Destination

Status scheme, which supports and regulates Chinese tour group operators in Australia; as well as the Tourism Demand-Driver Infrastructure programme, which provides support to state and territory governments in developing tourism infrastructure.

Daniel joined Austrade in 2014 from the Department of Immigration and Border Protection, where he held senior roles, including managing Australia’s visa processing arrangements in North Asia and the Mekong region (based in Beijing), and running Australia’s refugee and humanitarian resettlement programme.

Productivity review of Australian international tourism industry

In November 2014, Austrade made a submission to the Productivity Commission’s review of Australia’s international tourism industry. The submission detailed the agency’s role in developing policy, managing programmes and providing research to strengthen Australia’s tourism industry and to grow Australia’s tourism market share.

Increasing tourism employment

A priority under the Tourism2020 strategy is to increase the supply of labour and skills, and Indigenous participation, in the tourism industry. Tourism employment plans (TEPs) are being rolled out across eight ‘hot spot’ regions that are experiencing acute labour and skills pressures. TEPs address specific regional employment issues and deliver practical workforce solutions

to improve the competitiveness of tourism businesses. At 30June 2015, TEPs had delivered 120targeted strategies, working with 1,200stakeholders to support regional workforce planning. TEPs have been recognised by the OECD as best practice learning models to support quality jobs in tourism.

Austrade has also developed A guide to developing tourism employment plans and a TEP advisory service to support additional regions with labour and skills shortages. Other resources developed include a workforce planning guide and TEP tools website, with information to support tourism and hospitality businesses with recruitment, retention and skills needs.

Access to international labour is important for Australia’s tourism industry, particularly when local labour cannot be sourced. Working holiday visas allow businesses to manage seasonal peak labour demand with short-term, low-skilled labour from overseas.

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The Australian Government is currently negotiating new working holidaymaker agreements with around 20countries that will support the industry’s employment needs. The Government has also negotiated a new work and holidaymaker arrangement with China, and since 1July 2014, the occupation of ‘chef’ has been included on the Skilled Occupations List.

To support Tourism2020, Austrade commissioned Deloitte Access Economics to undertake another national tourism labour force survey in mid-2015. This survey will update previous work from 2010 to determine how the industry is tracking against shortages, and will also identify key issues impacting on the sector’s labour force.

Grants programmes

In 2014-15, Austrade administered a number of tourism-related grants programmes on behalf of the Department of Foreign Affairs and Trade (DFAT). They were:

âº the Tourism Demand-Driver Infrastructure (TDDI) programme

âº the T-QUAL Grants Programme âº the Tourism Industry Regional Development Fund (TIRF) grants programme

âº the Tasmanian Regional Tourism Package.

DFAT was the appropriated entity for the TIRF, T-QUAL and TDDI programmes in 2014-15. Austrade provided staff within its tourism division to administer grants under these programmes, with DFAT then making the grants payments.14 A brief description of the programmes is given below.

The TDDI programme delivers demand-driver infrastructure for the tourism industry. Through

its state and territory counterparts, this grant programme is delivering $43million over four years. This programme reiterates the Government’s commitment to refocus tourism grants funding to a programme that will ensure the benefits of government investment are multiplied across the tourism sector.

Funds for the TDDI programme are provided to state and territory governments, which are best placed to decide their tourism infrastructure priorities. Projects should stimulate demand along the tourism supply chain, with the benefits of each project accruing to more than one business.

The T-QUAL Grants Programme provided competitive merit-based project grants. The programme terminated in 2014-15. All existing projects were completed by 30June 2015.

The Tourism Industry Regional Development Fund grants programme provided competitive grants for accommodation and attractions projects in regional areas. Existing projects were completed by 30June 2015 and no further TIRF grant rounds will be offered.

Unallocated funds under the ceased TIRF and T-QUAL grants programmes have been consolidated into the TDDI programme in line with the Government’s policy priorities for tourism.

The Tasmanian Regional Tourism Package is a part of the Government’s Tasmanian Jobs and Growth Package, with funding provided for 2014-15 and 2015-16. At the request of the Tasmanian Government, approval was given for the bulk of the funds allocated to the Regional Tourism Infrastructure and Innovation Fund to be moved to the 2015-16 funding year.

14 From 2015-16, Austrade will be the appropriated entity for the remaining TDDI programme.

78 Australian Trade Commission Annual Report 2014-15

Tourism Research Australia

Tourism Research Australia (TRA) provides tourism data and analysis across Australia’s international and domestic tourism markets, as well as forecasts of tourism activity. TRA supports the Tourism2020 strategy by providing independent research that informs the development of the strategy’s principal objectives, and tracks the progress of tourism’s critical performance indicator, the 2020 Tourism Industry Potential.

In partnership with Tourism Australia, TRA has undertaken Asia Marketing Fund research to assist efforts to grow tourism demand from Asia—another priority area under the Tourism2020 strategy. Through its Destination Visitor Survey, TRA, in collaboration with state and territory government tourism agencies, has also prepared research aligned to areas of strategic priority under Tourism2020.

TRA’s data and reports provide knowledge and information to assist in shaping policy settings that impact tourism labour and skills, transport policy and investment. This also informs the tourism industry and assists those in the industry who make critical business decisions.

Tourism’s role in Australia’s economic prosperity

Australia’s tourism sector provides the people-to-people links necessary to promote a deeper knowledge and appreciation of Australia as a world-class holiday, study, business and investment destination. This in turn leads to increased levels of trade and investment, and higher economic growth.

Austrade, through its role in tourism policy, is able to connect tourism across its wider spectrum of work supporting Australian businesses internationally, attracting productive foreign investment into Australia, and promoting Australia’s education sector. Specific examples are described below.

Ministerial business missions

Ministerial business missions are an excellent opportunity to promote Australian tourism, as well as an opportunity for particular tourism groups to target key customer segments like business and conference travel, and high-end

leisure travellers. In January2015, at Australia Business Week in India, Austrade coordinated a whole-of-government presence, working closely with the Department of Foreign Affairs and Trade, Tourism Australia, other Australian Government agencies, and state and territory governments. For more information on Australia Business Week in India, see page84.

Business events

The Hon Andrew RobbAOMP, Minister for Trade and Investment, launched the Attracting business events to Australia guide in November 2014. It sets out how Austrade and Tourism Australia can support event organisers through the event bidding and delivery process, and strengthen Australia’s share of the international business events market.

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TRA delivers tourism information for Australian tourism regions and local government areas. It also undertakes strategic regional research projects, such as the Destination Visitor Survey, in conjunction with state and territory government tourism agencies. TRA released 24research reports in 2014-15, as outlined in Table4 (see page 81).

National surveys

Through its International Visitor Survey, TRA collects information on the travel behaviour of international visitors. This is the only comprehensive collection of data on the travel characteristics of international travellers

to Australia and the money they spend. The outputs are used extensively by all levels of government and by industry and investors for business planning, policy formulation, marketing, and identifying and supporting investment opportunities.

The TRA’s National Visitor Survey collects information on the travel behaviour of Australian residents, including overnight trips, day trips and overseas travel. The introduction of mobile phone interviewing has removed the bias caused by non-coverage of the increasing number of Australian residents who do not have a fixed-line phone. It also means that the National Visitor Survey age profile will more

The guide can be used as a resource for tourism industry stakeholders to understand how and when to seek the support of Austrade and Tourism Australia in three key areas—bidding for, marketing and leveraging events.

Business events demonstrate Australia’s capabilities; they make a significant contribution to the tourism industry; and they develop trade and investment relationships. They play an important role in connecting industry leaders and accelerating innovation through the exchange of information and ideas. They are also a significant platform to attract foreign investment and talent flows to Australia.

Tourism investment

Australia’s hotel industry has a long history of foreign direct investment. High real estate transparency is a major factor behind the strong demand from global investors, who seek quality hotel assets or development opportunities.

Corporate groups are developing hotels or acquiring established assets for repositioning as a way of growing a brand globally.

Australian hotel asset trades reached a new high in 2014, with more than $2.5billion of accommodation real estate changing hands. 1 This is the highest level ever recorded, and around 30percent higher than the 2007 peak. This highlights the current weight of capital globally, and the positive sentiment towards the Australian hotel and tourism sector.

Austrade’s senior investment specialist for tourism infrastructure promotes Australia as an investment destination of first choice, working with state and territory governments to ensure projects get off the ground. This specialist plays an important role in identifying regulatory and other barriers to tourism investment in Australia.

1 Transaction data has been sourced from Jones Lang LaSalle, and pipeline data sourced from Austrade’s in-house research.

80 Australian Trade Commission Annual Report 2014-15

closely reflect that of the population aged 15years or older, addressing the under-coverage of young people (who are more likely to be mobile-only) and the over-representation of older residents (more likely to live in fixed-line households).

Results of the International Visitor Survey and National Visitor Survey are released quarterly, and data from these surveys, in conjunction with the regional expenditure estimates, are key components of the ABS Tourism Satellite Account within the Australian National Accounts. The survey data also informs TRA’s tourism forecasts and numerous other publications.

Strategic and economic research

TRA measures the structure and performance of the Australian tourism industry through strategic and economic research. It also delivers tourism business and employment data, and economic impact and regional expenditure data. This research supports policymaking, marketing and industry development. Key publications released in 2014-15 include:

âº State of the Industry 2014—analyses the performance of the Australian tourism industry against the 2020 Tourism Industry Potential. It examines the challenges ahead and how the industry needs to respond. This report is released annually.

âº Tourism Investment Monitor 2015—provides an estimate of the total value of large-scale tourism projects in the tourism investment pipeline. This report is released annually.

âº Tourism Forecasts: Autumn 2014—provides 10-year forecasts for inbound and domestic tourism sectors at the national and state and territory levels.

âº State Tourism Satellite Accounts 2013-14— provides time-series measures of tourism’s

economic contribution to states and territories. Contribution is measured both directly and indirectly by gross value added, output, gross state product and employment in the tourism sector.

âº Tourism Regional Profiles 2013-14— provide comprehensive tourism demand and supply data for 77Australian tourism regions, and all states and territories. These reports are released annually.

âº Local Government Area Profiles— provide comprehensive tourism demand data from TRA, along with business and demographic data from the ABS, for more than 200local government areas.

Most TRA research, including a broad range of statistics collected from the International Visitor Survey and National Visitor Survey, is freely available on the TRA website, www.tra.gov.au.

TRA generates revenue from customised data requests and subscriptions to TRA Online, a database containing time-series data from the International Visitor Survey and National Visitor Survey.

Engaging with the China tourism market

China continues to be Australia’s most important inbound tourism market. Chinese tourists spend more per capita than any other international visitors, contributing around $5.4billion to the Australian economy for the year ended September 2014. The Australia-China relationship was enhanced in November 2014, when Australia and China negotiated a historic free trade agreement that promises to yield strong economic benefits for both nations. From the tourism policy, programmes and research perspective, Austrade engages with the China tourism market in a number of ways. These are described on page 82.

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Table 4: Reports released by Tourism Research Australia, 2014-15

Report name Date published

International Visitors in Australia: December 2014 quarterly results of the International Visitor Survey 21 June 2015

Tourism Investment Monitor 2015 8 May 2015

State Tourism Satellite Accounts 2013-14 24 April 2015

Tourism Region Profiles 2013-14 21 April 2015

Dispersal of Chinese Free and Independent Leisure Visitors in Australia 18 March 2015

Travel by Australians: December 2014 quarterly results of the National Visitor Survey 11 March 2015

Tourism Profiles for Local Government Areas in Regional Australia 26 February 2015

Food and Wine Tourism in New South Wales 28 January 2015

Tourism Businesses in Australia, June 2010 to June 2013 23 January 2015

Tourism Ready Reckoner: September Quarter 2014 23 December 2014

Tourism Update: Updated Results to ‘State of the Industry 2014’, September Quarter 2014 23 December 2014

Travel by Australians: September 2014 quarterly results of the National Visitor Survey 10 December 2014

International Visitors in Australia: September 2014 quarterly results of the International Visitor Survey 3 December 2014

State of the Industry 2014 29 October 2014

Tourism Ready Reckoner: June Quarter 2014 28 October 2014

Travel by Australians: June 2014 quarterly results of the National Visitor Survey 10 September 2014

Chinese Resident Perception of Queensland 8 September 2014

International Visitors in Australia: June 2014 quarterly results of the International Visitor Survey 3 September 2014

Northern Territory Visitor Touch Points 15 August 2014

Visitor Perceptions of the ACT 8 August 2014

Events: Drivers of Regional Tourism 8 August 2014

Tourism Update: Updated Results to ‘State of the Industry 2013’, March Quarter 2014 22 July 2014

State Tourism Forecasts 2014 10 July 2014

Travel by Australians: March 2014 quarterly results of the National Visitor Survey 9 July 2014

82 Australian Trade Commission Annual Report 2014-15

China Approved Destination Status scheme

The China Approved Destination Status (ADS) scheme is a bilateral tourism arrangement between the Australian and Chinese governments allowing Chinese leisure tourists to travel to Australia in groups. Australia can host leisure group tours from China. Austrade’s role is to ensure that inbound operators deliver the product they promise the traveller.

The Chinese Government views Australia’s ADS scheme as best practice. Maintaining this relationship is important both for the economic benefit Chinese tourism brings to Australia, and the broader relationship between the two countries. Since 1999, Australia has hosted more than 1million ADS tourists, and currently 35percent of leisure tourists from China are ADS tourists. For the year ended March 2015, Tourism Research Australia data show Chinese arrivals increased by around 19percent to a record 891,500visitors.

A revised ADS Code of Business Standards and Ethics, which sets out the responsibilities of inbound tour operators and tour guides, was released in December 2014, following a change to legislation in China. The new code sets out the responsibilities of inbound tour operators and tour guides operating within the ADS scheme.

Australia-China Tourism Dialogue

In September 2014, Austrade hosted a delegation from the China National Tourism Administration in Sydney for the annual Australia-China Tourism Dialogue. The dialogue is a meeting between senior officials to identify and progress work on bilateral tourism issues under the 2011 Memorandum of Understanding on Tourism Cooperation between Australia and China.

Air services arrangements

In January 2015, the Australian Government negotiated a landmark air services agreement with China. Both countries agreed on reconfigured arrangements that will triple gateway capacity between Australia and China by the end of 2016. Under the new arrangements, airlines from both nations may operate 26,500seats per week between China’s gateway airports—Guangzhou, Shanghai and Beijing—and Australia’s gateway airports—Sydney, Melbourne, Brisbane and Perth. This is an increase of 4,000 more seats than was previously permitted from all of China into Australia’s gateway airports. A further 7,000weekly seats will be phased in during the next 18months, bringing the total weekly gateway entitlement for each country to 33,500seats by the end of 2016.

Both countries also agreed on a new package of 26,500seats per week for flights between China’s regional cities and Australia’s gateway airports. This arrangement will be supplemented by an additional 7,000seats per week during the next 18months.

Agreement with the China Tourism Academy

In November 2014, Austrade, through Tourism Research Australia, signed a memorandum of understanding with the China Tourism Academy. This agreement will strengthen Australia’s relationship with China on tourism research. The initial agenda is to develop common metrics around visitation and satisfaction.

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Austrade’s international network Austrade’s international network works with its onshore network to contribute to Australia’s economic prosperity through its trade promotion and investment attraction activities, promotion of Australia as an international study destination, and connecting tourism attraction and policy work across its wider spectrum of work. Austrade complements the economic diplomacy agenda of the Department of Foreign Affairs and Trade, and its international network extends—and sometimes leads—the Australian Government’s presence in a number of international markets.

At 30 June 2015, Austrade’s network had 79 overseas offices in 47 markets, and 32 of those offices were in cities where the Department of Foreign Affairs and Trade does not have an embassy, consulate or high commission. Examples of Austrade’s achievements of its deliverables and key performance indicators, in a number of international markets, are provided below and on the following pages.

India

With a projected growth rate of 7.5percent in 2015-16, India is set to become the world’s fastest-growing major economy. By 2019, India’s economy will double in size, compared with 2009.15 Australia and India have many common areas of interest, including trade and cultural ties within an Indo-Pacific context. The completion of a Comprehensive Economic Cooperation Agreement between the two countries will result in expanded opportunities for trade, reduced barriers and increased regulatory transparency. Indian companies are in the process of internationalising, and this is driving

strong investment growth as they seek new markets and technologies, and access to natural resources to secure India’s supply chains for rapid industrialisation.

In September 2014, the Prime Minister, the Hon Tony AbbottMP, visited India along with a delegation of 30senior Australian business executives from the resources, energy and education sectors. Austrade worked with the Department of Foreign Affairs and Trade on a programme for the accompanying delegates that included meetings with the heads of some of India’s largest companies, Indian government ministers and officials, as well as firm-level engagement at a major Indian Chambers of Commerce event. In November 2014, India’s Prime Minister, the Hon Narendra Modi, made a reciprocal visit to Australia. Further official visits by ministers and senior government representatives from both countries have followed, reinforcing the growing importance of the Australia-India relationship.

Energy has been the traditional focus of the Australia-India economic relationship. Australia supplies coal and other resources to India, and strong growth is predicted for gas. Austrade is assisting Australian mining equipment, technology and services (METS) companies to enter the Indian market, and Australia’s METS capabilities are highly regarded—around 30Australian METS companies are currently operating in India. These firms have won contracts in areas such as mine planning software, mine safety systems and equipment, coal washery power supply, mineral weighing systems and on-belt mineral scanning systems.

15 Christine Lagarde, Managing Director, International Monetary Fund, 16 March 2015, at www.imf.org/external/np/speeches/2015/031615.htm.

84 Australian Trade Commission Annual Report 2014-15

Australia Business Week in India

In January 2015, Austrade organised the largest-ever Australian business event to take place in India, Australia Business Week in India. The Hon Andrew RobbAOMP, Minister for Trade and Investment, led a business delegation of 450representatives to India. The mission focused on 14industry sectors across 125events, and covered eight cities during a five-day programme. Highlights included:

âº Vibrant Gujarat Summit in Ahmedabad with a delegation supported by the Australia-India Business Council, and where Australia held ‘partner country’ status

âº the India-Australia Business Summit, co-hosted by the Confederation of Indian Industries and Austrade, and attended by more than 800delegates

âº India Water Week, where Australia was ‘partner country’

âº two gala dinners, held in partnership with Tourism Australia, showcasing Australian food, wine and tourism to more than 1,200guests in Delhi and Mumbai, with a menu curated by chef Adam D’Sylva

âº several investor roundtables, industry and government meetings, site visits and networking events.

Australia Business Week in India focused on building on the momentum created by high-level reciprocal visits in 2014 by the prime ministers of both countries. MrRobb’s participation in Australia Business Week in India, along with other senior Australian and state government representatives, emphasised Australia’s commitment to expanding economic ties with India. Business delegates gained

From an investment perspective, Indian companies such as Larsen & Toubro, Aarvee Engineering and AMR have established offices in Australia to provide engineering solutions for major mining and liquified natural gas projects. Attracting investment in resources and associated infrastructure is a key priority for Austrade.

Indian companies Tata & Sons, Mahindra, Motherson, Hero Corporation, Reliance and Essar are increasingly investing in research to improve their product offerings, to drive

productivity and build an export-focused manufacturing sector. Accordingly, Austrade has established the Australian Innovation Showcase, a five-year initiative to position Australia as a source of world-class research, technology and innovation. In October 2014, Austrade coordinated a month-long series of events for Indian industry to interact with groups of Australia’s leading research and technology experts from the ICT, life sciences, and materials science sectors.

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unprecedented access to India’s federal and state government officials and CEOs. Meetings were held with Prime Minister Narendra Modi, as well as 13Indian federal ministers, four state chief ministers, and key corporate representatives.

Austrade worked with the Department of Foreign Affairs and Trade to make the programme a success, taking a coordinated approach with Tourism Australia, the Department of Infrastructure and Regional Development, the Department of Agriculture and the Department of the Environment. The Hon Jamie BriggsMP, Assistant Minister for Infrastructure and Regional Development, and Senator the Hon Richard Colbeck, Parliamentary Secretary for Agriculture, participated in the event. Austrade provided input to programmes for the Hon Mike BairdMP, Premier of New South Wales; the Hon Martin Hamilton-SmithMP, South Australian Minister for Trade and Investment; and Trade and Investment Queensland.

Australian participants in Australia Business Week in India completed a follow-up survey from Austrade. The results found that 98per cent of participants were satisfied with their experience at Australia Business Week in India, of whom 82per cent rated the event as extremely good or very good. Nearly three-quarters of participants said they intended to return to India to pursue opportunities identified during Australia Business Week in India, and 90per cent expect commercial outcomes to develop in India over the next 12months. Through this survey, Austrade was able to identify aspects of major offshore event programmes that are valued highly by participants. These include the quality of business networks and contacts introduced; the relevance of the mission programme to their business; and the on-the-ground execution of the event.

Pictured: Some of the 450 delegates at the gala dinner at the Australian High Commission in Delhi, during the Australia Business Week in India mission in January 2015. Photo: Graham Crouch.

In materials science, 24 Australian business leaders and researchers met with Indian corporations to demonstrate expertise and explore commercial opportunities. The meetings

and seminars were held in New Delhi, Mumbai, Ba ngalore, Chennai, Hyderabad, Pune and

Ahmedabad. They highlighted the potential for bigger Australia-India commercial partnerships

450 Australian business representatives attended Australia Business Week

in India

98% of Australia Business Week in India participants were

satisfied with their experience

125

business events were held during Australia Business Week in India

90% of Australia Business Week in India participants expect commercial outcomes in

India in the next year

86 Australian Trade Commission Annual Report 2014-15

and investment in advanced services and technology. Austrade collaborated with the Department of Foreign Affairs and Trade, the Department of Industry, the Department of Education, CSIRO, and state and territory governments to make this programme a success. Early outcomes have included active interest from Indian companies in investing in Australian research programmes, commercialising Australian research outputs, and using Australian technologies in their global supply chains. Several Australian participants subsequently signed research deals worth more than $2million and non-disclosure agreements to take forward commercial discussions.

The showcase was well received by Indian businesses and media, as well as the participating Australian research institutions, universities and technology companies. They liked the practical approach to demonstrating Australia’s innovation credentials, identifying new sources of funding to commercialise Australian technology, and providing access to the global value chains of India’s multinational companies.

A growing number of Australian education institutions are taking advantage of changing demographics in India, such as Deakin University, which, in 1996, was the first Australian university to establish an office in India. Austrade works closely with Deakin University, and supported collaborations such as research partnerships with Bharat Forge and Max India Group, and the establishment of a nanobiotechnology research centre, which received $10million expansion funding in 2014 from Deakin University and the Energy and Resources Institute based in Delhi. As a result of this wider engagement, Deakin’s Indian student population has grown significantly—including undergraduate and PhD students.

Austrade has identified 14 areas of the India market where Australian organisations could compete for and win new business.16 Some of the areas in which Austrade has assisted Australian organisations to grow their business in India during 2014-15 include:

âº advanced manufacturing innovation—Orbital Australia, for automotive engineering and design services

âº water management—Hydronumerics, for desalination modelling services

âº cultural heritage and tourism services—Sue Hodges Productions, for cultural heritage services such as cultural and natural heritage interpretation in the state of Punjab

âº sports development—Victoria University, for consultancy work to develop a sports framework for the state of Kerala

âº dairy management—Profitable Dairy Systems and Chamberlain Veterinary Services, to undertake dairy development feasibility studies

âº road safety—Martin Small Consulting, which secured a World Bank-funded road safety technical design project

âº heavy haul rail—TTG was chosen as the preferred supplier for an Indian Railways energy optimisation project.

16 The 14 areas are: agriculture equipment, technology, services and dairy; cultural services; education; health and assisted living; health—life sciences and tropical medicine; investment—resources and energy; investment—innovation and research; premium food and beverages; resources—mining equipment, technology and services; sport; tourism; transport—rail; transport—road safety; and water.

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China

China is Australia’s number-one trading partner and export market; it’s the largest source of international students, the most valuable tourism market, a major source of foreign direct investment, and Australia’s largest agricultural goods market. Australia is China’s seventh-largest trading partner, and in 2014, the total value of two-way trade in goods and services reached almost $153billion. China accounts for 23percent of Australia’s total trade.17

China is also Australia’s largest services export market. In 2014, services exports to China were valued at $8.2billion. Travel, including education-related travel, accounted for around 80percent of Australia’s services exports to China.18 More than 150,000Chinese nationals studied in Australia on a student visa19 in the same year, with Chinese students accounting for 26percent of Australia’s total international student population, which contributed an unprecedented $4.4billion in export income.20 In the last year, there was an overall increase of 8.4percent in the number of Chinese students on a student visa.

The number of outbound trips made by Chinese tourists exceeded 100million in 2014, and in the year ended June2014, tourist numbers in Australia from China grew 21percenttoarecord 935,000visitors, making China our second-largest source of tourists after New Zealand.21 The total spend by Chinese visitors reached $5.7billion, a year-on-year increase of 19percent.22

China remains an important source of foreign direct investment (FDI) into Australia. China’s worldwide outbound FDI in 2014 reached US$116billion, a year-on-year increase of 15percent.23 China now ranks in third place as a leading global source of FDI.24

In 2014-15, Austrade achieved significant outcomes in FDI from China, including Wanda Group’s decision to develop major new hotels on the Gold Coast and at Sydney’s Circular Quay. This was a direct result of its participation in the tourism investment roundtable, led by the Hon Andrew RobbAOMP, Minister for Trade and Investment, at Australia Week in China in April2014. For more information on Wanda Group’s investments, see page 74.

Austrade also supported Landbridge Group’s $200million investment in the oil and gas sector through the acquisition of Brisbane-based WestSide Corporation. Austrade has been working with Landbridge since 2012, and the company participated in a CEO investment roundtable, hosted by MrRobb, also during Australia Week in China.

Australian companies continue to reap rewards from their participation in the Australia Week in China 2014 programme. A $5.5million milk supply contract signed by Freedom Foods is indicative of the commercial benefits that can flow from in-market relationships fostered during Australia Week promotions or other business missions in markets such as China.

17 Department of Foreign Affairs and Trade 2014, Composition of Trade Australia 2014.

18 Department of Foreign Affairs and Trade, Trade and Economic Fact Sheets, China.

19 Department of Education and Training, End-of-year summary of international student enrolment data—Australia—2014.

20 Department of Education and Training, Export income to Australia from international education activity in 2014, June 2015.

21 Australian Bureau of Statistics, cat. no. 3401.0, Overseas arrivals and departures, Australia, Table 4: Short-term Movement, Visitor Arrivals—Selected Countries of Residence: Seasonally adjusted.

22 Tourism Research Australia, International visitors in Australia, Year ending December 2014.

23 United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2015, Web table 2: FDI outflows, by region and economy, 1990-2014.

24 Ibid.

88 Australian Trade Commission Annual Report 2014-15

E-commerce in China—an opportunity for Australian businesses

In recent years, the dynamic growth of the online retail sector in China has attracted the world’s attention because it has transformed the way in which businesses can reach and understand Chinese consumers.

By June2014, it was estimated that more than 300million Chinese consumers shopped online. In 2014, total sales were more than half-a-trillion Australian dollars—a 50percent increase on the previous year.1 Demand is particularly strong for baby products, healthcare and packaged foods, while cross-border policies being trialled by the Chinese Government substantially simplify import regulations for small and medium-sized enterprises selling directly to consumers.

In September 2014, Austrade supported Tmall’s ‘Australia Campaign’, which featured more than 40Australian food and wine brands and products, including Weet-Bix, Berri, Devondale, Bega Cheese and Penfolds. The promotion received almost 15million impressions and 18,000comments, with 40percent of participating merchants recording an increase in gross merchandise

volume of more than 100percent during the campaign. This includes the purchase of more than 1,000litres of fresh Australian milk.

In June 2015, Austrade published E-commerce in China: A guide for Australian business. The guide is highly practical and comprehensive, covering every facet of online business in China. It is freely available to Australian businesses on www.austrade.gov.au.

E-commerce in China: A guide for Australian business was launched in conjunction with a series of seminars held in Melbourne and Sydney and on the Gold Coast. There was strong interest, with almost 400Australian companies attending. For the first time, representatives from major Chinese online platforms Alibaba, JD.com, Yihaodian and VIP.com were on hand to give presentations and answer questions from Australian businesses.

Austrade has initiated a China e-commerce outreach programme, which is being implemented through the TradeStart network, state and territory governments and industry partners. More seminars, webinars and other information sessions will be delivered in metropolitan and regional centres across Australia in the future.

Pictured: Cover shot of E-commerce in China: A guide for Australian business, released by Austrade in June 2015.

1 National Bureau of Statistics, China.

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Austrade continued to work in close collaboration with food and beverage industry bodies, such as Meat & Livestock Australia (MLA), Dairy Australia and Wine Australia. In November2014, Austrade organised an Australian food safety event in Changsha, working in collaboration with the Department of Agriculture, MLA, Wine Australia and the Seafood Cooperative Research Centre. The event focused on Australia’s food safety systems and excellent credentials.

The signing of the China-Australia Free Trade Agreement (ChAFTA) in June 2015 was a landmark in China-Australia economic relations. Austrade and its industry partners have been actively raising awareness of the benefits of ChAFTA in Australia since the conclusion of negotiations in November 2014.

Austrade was asked to deliver a two-year programme of onshore seminars, hosted by

Australian Government ministers throughout Australian capital cities and regional areas, to prepare industry for the opportunities ahead. Ten seminars had been conducted at 30June2015. Now that ChAFTA has been signed and is expected to come into force later this year, Austrade’s efforts are raising awareness of the benefits of the agreement, and the agreements with Japan and Korea, among existing and potential buyers and investors.

Association of Southeast Asian Nations

The Association of Southeast Asian Nations (ASEAN) is an intergovernmental political and economic organisation made up of 10 member states—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. Australia has a substantial trade relationship with ASEAN and Austrade is active within the region. In 2014, Australia’s trade in goods and services with ASEAN accounted

Liu Bing Senior Trade Commissioner, Shanghai

Liu Bing leads Austrade’s Shanghai office, which has around 30staff. It is one of the largest and busiest offices in Austrade’s network. She is also responsible

for the Yangtze River Delta Region along the East China coast, which is regarded as China’s financial and economic hub, and is home to many large financial institutions and e-commerce companies.

Educated in Australia, Bing is fluent in Mandarin and Cantonese, and was previously involved in the Australian health sector before joining Austrade in 2002 in China. Since then, she has

served as a Trade Commissioner in Beijing, Guangzhou and Shanghai, and has developed a deep understanding of doing business in the dynamic Chinese commercial environment.

Bing said she is excited about the new commercial opportunities that will be available to Australian businesses as a result of the China-Australia Free Trade Agreement (ChAFTA). ‘The implementation of ChAFTA, coupled with an economic restructuring towards sustainable development in China, will provide many lead-ins for Australian businesses beyond traditional industries’, she said. ‘My team and I look forward to helping Australian businesses to access new industries such as financial services and e-commence.’

90 Australian Trade Commission Annual Report 2014-15

for around 15percent of total trade, worth $102billion,25 up from $43billion in 2001. This makes ASEAN Australia’s second-largest trading partner, behind China.

Australia’s exports to ASEAN are mostly natural resources and agricultural products. The region is Australia’s primary export market for wheat, milk and honey, as well as ferrous waste and scrap. In 2014, two-way trade in services was worth $22.8billion, of which Australia exported $9.7billion. ASEAN accounted for about 16.2per cent of Australian services exports.26

Singapore

Singapore is Australia’s largest trading partner in ASEAN, accounting for around 30per cent of all Australian trade with the region, followed by Malaysia, Thailand and Indonesia.27 In August 2014, the Hon Andrew Robb AO MP, Minister for Trade and Investment, led an Austrade-organised aerospace business mission to Singapore. As a result of this mission, a number of participants are in advanced negotiations with their Singapore counterparts, including BAE Systems, which has entered into a collaborative agreement with Singapore Technologies Aerospace Limited.

Australia is evolving as an investment destination of choice within ASEAN, in response to risk mitigation, vertical integration and access to Australian advanced manufacturing expertise. Singapore is the largest ASEAN investor in Australia, particularly in hotels and infrastructure.

Thailand

Two-way trade between Australia and Thailand in goods and services approached $19billion in 2014.28 Australia has also received significantly increased investment from Thailand in recent years, particularly in mining, agriculture, renewable energy and tourism infrastructure. Austrade facilitated six Thai investments in Australia last year, making a significant contribution to the increase of overall FDI stock from Thailand, up from $52million in 2005 to $4.6billion in 2014.29

Vietnam

Vietnam is a significant recipient of development assistance from Australia. This year, Austrade identified and prioritised the crossover points between Australia’s trade promotion and aid programmes in Vietnam. A number of economic diplomacy initiatives were set up to contribute to Vietnam’s development needs and create commercial opportunities for Australian businesses. Austrade is progressing initiatives in aviation safety and sustainable mining, while water and food safety initiatives are under development.

In January 2015, Vietnam’s Minister for Natural Resources and Energy visited Australia to learn about mining capabilities in the private and public sectors, and in research and development. In February 2015, senior representatives from three Vietnamese firms visited the Avalon Air Show, resulting in the signing of two memorandums of understanding in the flight training area. In April 2015, Austrade led an Australian mining delegation

25 Department of Foreign Affairs and Trade, Composition of Trade Australia 2014, (http://dfat.gov.au/about-us/publications/Documents/ cot-cy-2014.pdf), Table 7: Australia’s Trade in Goods and Services, page 43.

26 Department of Foreign Affairs and Trade, Composition of Trade Australia 2014, (http://dfat.gov.au/about-us/publications/Documents/ cot-cy-2014.pdf), Table 13: Australia’s Trade in Services, page 53.

27 Ibid, page 43.

28 Department of Foreign Affairs and Trade, Thailand fact sheet.

29 Australian Bureau of Statistics 2015, cat. no.352.0, International investment position, Australia: Supplementary statistics, 2014, Table 2: ‘Foreign investment in Australia: Level of investment by country and country groups by type of investment and year ($million)’, released 8 May.

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to Vietnam for meetings with regulators and prospective partners.

Indonesia

The ASEAN region remains a significant source of international students for Australia, with around 118,000 enrolments from ASEAN in 2014.30 Students from ASEAN countries comprised 20percent of total international enrolments, and contributed $3.6billion to the Australian economy in 2014.31

During the year, Austrade reached out to Indonesian provinces to identify businesses keen to engage with Australian vocational education providers and researchers. As a result of Austrade’s visits to Medan in North Sumatra, an opportunity was identified with a private hospital looking for general and specialist nurse training. Expressions of interest were sought from providers in Australia, with the hospital selecting AFG Venture Group to provide enhanced English language capability, and manage specialist nursing care training in partnership with an Australian east coast university. It is anticipated that the training, which commenced in mid-2015, will lead to the establishment of a nursing school attached to the hospital.

Malaysia

In Malaysia, Austrade focuses on sectors in which Australian goods and services meet the needs of Malaysia’s growing middle class. These are health and aged care, infrastructure, premium food and beverages, and industrial

development. Austrade is especially keen to build Australia’s reputation in the healthcare sector, given the rise of non-communicable diseases in Malaysia, as well as its ageing population. Austrade developed an ‘Empowering the Elderly’ strategy, which has included introducing Australian aged care companies to Malaysian healthcare professionals, government agencies and developers at three major conferences organised by Austrade during the last two years. As a result, 10Australian aged care companies are involved in projects in Malaysia, including My Flex Health Group, Optimum Aged Care Systems, Lightwave International and Zencare Lifestyles Group. Austrade has also achieved greater visibility and commercial involvement for Australian firms already established in Malaysia, including Jeta Care and Veritas Architects Australia.

Promoting economic diplomacy in ASEAN

In June 2015, Austrade and the Department of Foreign Affairs and Trade (DFAT) undertook a joint economic diplomacy initiative and produced a report entitled Why ASEAN and why now? Insights for Australian business. The report sets out Austrade and DFAT’s rationale on the new wave of opportunities in ASEAN. Its primary objective is to encourage Australian businesses to start thinking of ASEAN as an increasingly connected region. It reflects the experiences of already successful Australian companies in ASEAN, and those of people on the ground in the Government’s network of diplomatic missions. The report explains why ASEAN’s scale and diversity make it imperative for Australian companies to consider doing

usiness in Southeast Asia, alongside the stablished economic giants of wider Asia, such as China.

30 Department of Education and Training, International Student Data 2014 (https://internationaleducation.gov.au/research/International- b Student-Data/Pages/InternationalStudentData2014.aspx#Time_ e Series), basic pivot tables 2011-2014.

31 Department of Foreign Affairs and Trade, Trade and economic fact sheets for countries and regions, ASEAN-10, (http://dfat.gov.au/ trade/resources/Documents/asean.pdf).

92 Australian Trade Commission Annual Report 2014-15

United States

The United States is a major driver of the global economy and a world leader in international trade and investment, research and development expenditure, stock market capitalisation and share of large global corporations. The United States is Australia’s fourth-largest export destination32 and largest two-way investment partner, with the two-way investment stock reaching more than $1.1trillion in December 2013. In 2013-14, the United States was Australia’s third-largest two-way trading partner in goods and services (after China and Japan), at $58.2billion.33

The United States is the largest source of FDI for Australia and is also a primary driver of global FDI. It is a major market for the Australian Government’s five investment priorities. However, US domestic developments and market dynamics are likely to shape the nature of outcomes that can be delivered. Austrade focuses the majority of its resources on facilitating investment into Australia, and promoting Australia’s international education sector.

In May 2015, Austrade opened an office in Houston, Texas, taking its total number of US offices to five. This decision reflects the significant two-way trade and investment between Australia and Texas in particular, with Houston widely regarded as the global energy capital. Houston is the fourth-largest city in the United States, and the state of Texas leads the country for growth and exports. Austrade’s Houston office will be primarily focused on attracting productive foreign

32 Department of Foreign Affairs and Trade 2014, Australia’s trade in goods and services 2013-14.

33 Department of Foreign Affairs and Trade, ‘United States of America country brief’.

Kelly Ralston joined Austrade with a background in law, finance and government and held various corporate, strategy and change management

roles in the organisation before being posted overseas. In 2008, Kelly led Austrade’s participation in the Review of Export Policies and Programmes conducted by David Mortimer and John Edwards. Then, in 2010, Kelly managed the secretariat commissioned by the then Austrade CEO to conduct a whole-of-organisation assessment of Austrade’s operations, also known as the 2010 Austrade Review. This work led to the structure and focus of Austrade’s work today.

From 2011, Kelly served as Austrade’s senior representative at the Australian embassy in WashingtonDC. In that role, Kelly was responsible for Austrade’s trade and investment work in the mid-Atlantic and South-Eastern regions of the United States. Here, Kelly also led the promotion of Australia’s international education in North America.

In March 2015, Kelly relocated to Houston to establish the Australian Government’s new Consulate-General there, which is operated by Austrade. Looking back, Kelly said she has been fortunate to have had the opportunity to put her corporate strategy background into practice. ‘It is clear that Austrade’s commercial insight, connections and knowledge of specific opportunities in international markets is what our clients and stakeholders value most. Having a diverse mix of skills and experiences in our teams is the key to our success in continuing to deliver value’, Kelly said.

Kelly Ralston Consul-General and Senior Trade Commissioner, Houston

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direct investment to Australia. This includes a particular focus on resources and energy, agribusiness, and advanced manufacturing, services and technology, including medical-related opportunities. Promoting Australia’s education and research linkages and seeking out major opportunities for Australian companies in associated sectors are also priorities. The Houston office will also be responsible for providing passport and consular services across four states—Texas, Oklahoma, Arkansas and Louisiana.

Korea

Korea is the twelfth-largest economy in the world and the fourth-largest in Asia, with a population of 50million and a GDP of US$1.3trillion.34 Korea’s economic growth is projected to accelerate from 3.7per cent in 2014 to 4per cent in 2015—one of the highest growth rates of all advanced economies.35 Korea is Australia’s third-largest export market and its fourth-largest two-way trading partner.36

The Korean Government is facing long-term economic and social challenges, such as an ageing population, food security needs, acute energy requirements and a need to internationalise its workforce. The Korean Government has implemented a range of new policy initiatives to address these issues, many of which highlight the need for Australian firms to supply Korea with goods and services during this time of significant change. The signing of the Korea-Australia Free Trade Agreement (KAFTA), Australia’s first free trade agreement

with a major North Asian economy, enhances these opportunities.

KAFTA improves market access for Australian exporters, creates new services opportunities, enhances protection for Australian investors in Korea, and safeguards Australia’s competitiveness in this large market. With the agreement entering into force in December2014, 84percent of Australia’s goods exports by value can now enter Korea duty-free. When KAFTA is fully implemented, tariffs on 99.8percent of Australia’s exports to Korea will be eliminated. KAFTA offers major prospects for Australian companies, particularly in food and beverages, services and investment. Austrade works with Australian companies in Korea to develop these new opportunities.

From an investment perspective, the implementation of KAFTA will lift the screening threshold for non-sensitive Korean investments in Australia from $252million to $1.094billion. Australia is generally seen as a favourable destination for Korean outward investment, with Korea ranking as Australia’s 18th-largest foreign investor, with an FDI value in 2014 of $3.15billion.37 Austrade leverages this increased threshold by focusing its investment promotion, attraction and facilitation services primarily on the major infrastructure, agribusiness and food, and digital technologies sectors.

34 Department of Foreign Affairs and Trade, ‘Republic of Korea country brief’, at http://dfat.gov.au/geo/republic-of-korea/Pages/republic-of-korea-south-korea-country-brief.aspx.

35 International Monetary Fund 2014, Regional economic outlook: Asia and Pacific , April.

36 Department of Foreign Affairs and Trade, ‘Republic of Korea country brief’.

37 Australian Bureau of Statistics 2015, International investment position, Australia: Supplementary statistics, 2014, cat.no.5352.0, Table2: ‘Foreign investment in Australia: Level of investment by country and country groups by type of investment and year ($million)’, released 15May.

94 Australian Trade Commission Annual Report 2014-15

Australian exporters reap the benefits of the Korea-Australia Free Trade Agreement

The entry into force of the Korea-Australia Free Trade Agreement (KAFTA) in December 2014 has delivered early major gains for Australian exporters, improving their competitiveness in the Korean market.

Demand for Australian almonds grows

On entry into force, KAFTA eliminated the 8percent import duty on Australian almonds, strengthening Australia’s position as a nut exporter. The first major shipment of Australian almonds to Korea was delivered in September 2014. Austrade worked closely with the Almond Board of Australia to raise the profile of Australian almonds in the Korean retail market. With domestic production unable to meet local demand, nut imports into Korea have increased by between 25and

30 percent each year since 2009.1 Austrade assisted the export of Australian almonds into Emart, Korea’s largest hypermarket chain, by promoting Australian almonds in 50Emart stores during a two-month period.

Tariffs on Australian cherries removed

Australian company Reid Fruits has been exporting cherries to Korea for more than five years. It specialises in growing and exporting premium-quality dark cherries to consumers in around 20countries, and ensures that fresh Tasmanian cherries are on Asian supermarket shelves within four days of harvest. However, tariffs of 24per cent, along with strong competition from other countries with improved market access under their own free trade agreements, made it difficult for Reid Fruits to move into the Korean market. Under KAFTA, tariffs on cherries were removed upon the agreement entering into force, levelling the playing field for Reid Fruits, and allowing its quality cherries to be more competitive. Lucy Gregg, Business Development Manager, Reid Fruits, said, ‘KAFTA will help us increase our sales to Korea. It will make our cherries more competitive and more appealing to Korean consumers.’

1 Korean Customs Service.

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‘KAFTA will help us

increase our sales to

Korea. It will make

our cherries more

competitive and more

appealing to Korean

consumers.’

Lucy Gregg, Business Development Manager,

Reid Fruits.

New opportunities for financial service providers

KAFTA will also enhance Australian financial service providers’ access into the Korean market. Korea is home to some of the world’s largest pension funds and institutional investors, offering many opportunities for Australia’s experienced international infrastructure fund managers. Hastings Fund Management, a specialist fund manager of infrastructure debt and equity, was one of the first companies in the world to specialise solely in infrastructure funds management. Hastings approached Austrade for assistance with its market development activities in Korea, and through advice, guidance and access to Austrade’s extensive contacts in the Korean financial services sector, Austrade was able to help Hastings find business partners in Korea. Hastings opened an office in Seoul in 2013, and was appointed the foreign general partner of a major Korean pension fund in 2014.

Pictured on the previous page: Australian almonds on sale at a retail store in Korea, in September 2014. Photo: Austrade.

Pictured on this page: Cherries from Reid Fruits on display in the Hyundai department store in Seoul, Korea. Photo: Austrade.

96 Australian Trade Commission Annual Report 2014-15

Australian grape growers and wine producers receive boost from Japan-Australia Economic Partnership Agreement

In February 2015, Austrade, in collaboration with the Australian Table Grape Association, the Victorian Government and Australian Horticulture Innovation, led a high-profile Japanese buyer mission to Victoria to further promote Japan-Australia Economic Partnership Agreement (JAEPA) tariff reductions and stimulate Japanese demand for grapes. Direct outcomes from the mission amounted to around $4.3million in sales. At 30June 2015, Australia had exported 165containers to Japan, surpassing initial expectations of 100containers, with shipments totalling $12million. As tariffs are eliminated

in the next seven to 10years, Japan is now a priority market for future expansion for the Australian table grape industry.

Austrade is also working closely with the Australian Grape and Wine Authority on promoting premium and middle-priced wines through the ‘Taste of Australia’ campaign, which is designed to improve the perceptions of Australian wine through seminars, tasting events, targeted media outreach and market visits by chief winemakers from Australia. Under JAEPA, the tariff on bottled wines will be eliminated over seven years, while the bulk wine tariffs were eliminated on entry into force. According to the Australian Grape and Wine Authority, exports to Japan grew by 20per cent to a record 11million litres—a strong indication that exporters are taking advantage of the benefits of JAEPA. 1 Pictured: Australian table grapes on sale at the Hankyu Department Store, Osaka, March 2015. Photo: Stephen Baud.

1 Australian Grape and Wine Authority media release, 28April 2015.

Japan

Japan’s highly industrialised economy is the third-largest in the world and Japan was Australia’s second-largest trading partner in 2014.38 Japan is also Australia’s second-largest export market, and should remain so for the foreseeable future. Two-way goods and services trade between Australia and Japan was valued at $70.3billion, while goods exports to Japan in

2014 were valued at $48.3billion, representing approximately 18.2per cent of Australia’s total goods exports.39

Australia’s major exports to Japan included liquefied natural gas (LNG), coal, iron ore, beef, and copper ores and concentrates. On the other side of the trade ledger, Japan is Australia’s third-largest source of imports. Total bilateral trade in services in 2013 was valued at about

38 Department of Foreign Affairs and Trade, ‘Japan country brief’, at http://dfat.gov.au/geo/japan/Pages/japan-country-brief.aspx.

39 Department of Foreign Affairs and Trade, Japan fact sheet, at http:// dfat.gov.au/trade/resources/Documents/japan.pdf.

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$4.3billion, mostly in the recreational travel, transport and education sectors.

Japan is Australia’s third-largest investor, with an investment stock of $174.6billion as at the end of 2014. Direct investment accounts for $66billion of Japan’s total investment in Australia, and has been essential in the development of many of the export industries that have driven Australia’s growth, including in large-scale projects to meet Japanese demand for resources such as LNG, iron ore, coal and copper. Japanese investment has recently extended beyond the traditional areas of natural resources to diverse sectors such as financial services, infrastructure, information and communications technology, property, food and agribusiness.40

The Japan-Australia Economic Partnership Agreement (JAEPA) entered into force on 15January 2015. To explain the benefits of the agreement to Australian businesses, Austrade delivered 68JAEPA-focused presentations, briefings and seminars, and jointly ran an additional nine events with the Department of Foreign Affairs and Trade in Japan.

Japanese corporations are looking to Australia for solutions to financial asset management, and for assistance with planning and delivering major sporting events, such as the Rugby World Cup (2019) and the Tokyo Olympics (2020). Austrade continues to work with Australian and Japanese companies to capture opportunities in these areas and build on Australia’s strong service sector offering in Japan.

Latin America

Latin America is one of the fastest-growing areas for oil and gas production globally. The region’s oil output is forecast to increase from 11.5percent to 12.2percent between 2013 and 2022,41 following widespread reform in several markets. Latin America is looking to Australia for help to sustainably develop this booming sector. Australian companies are experts in safely operating in remote locations, responding to challenges and risks, providing solutions to environmental and social issues, and workforce training.

In Latin America, Austrade works with a range of Australian companies across the value chain to investigate market entry or expansion opportunities, including new projects for exploration and production; bidding rounds for concession of oil and natural gas blocks; and the development of the oil and gas supply chain. Austrade’s offices in Argentina, Brazil, Colombia, Mexico and Peru have established a collaborative regional approach to capture the vast opportunities available for Australian service and equipment providers, researchers and education institutions across the continent. For example, in March 2015, Austrade, along with the Australia-Latin America Business Council and the University of Western Australia, hosted a Latin America energy roadshow in Perth. Australian suppliers from across the entire value chain attended—many of whom were attracted by the growing number of top-tier Australian resources and engineering companies already in Latin America.

Mexico is now a hotspot for oil and gas following significant energy reform bringing landmark changes for its state-owned hydrocarbon

40 Department of Foreign Affairs and Trade, ‘Japan country brief’ and Japan fact sheet. 41 Business Monitor International, October 2014.

98 Australian Trade Commission Annual Report 2014-15

SaÃ¯d Metwalli Trade Commissioner, Abu Dhabi

SaÃ¯d Metwalli manages Austrade’s Abu Dhabi office with responsibility for Qatar, and also leads the agency’s work in mining and rail across the Middle East and North Africa

region. SaÃ¯d takes pride in assisting exporters across diverse sectors, and thrives on the dynamic, fast-paced nature of his role. His commercial foundation, built in the private sector across the United States, Europe and Asia-Pacific region, is combined with a strong understanding of the business and cultural elements of the Middle East. This in turn

makes him ideally placed to advise exporters on their international expansion strategies.

‘Austrade has already delivered opportunities to Australian providers in the rail sector across equipment, technology, services and education, with deals signed and more awards pending’, he explained. ‘The next sector of focus where Austrade can play a pivotal role in uncovering and delivering opportunities is in mining, which is a priority sector for countries such as Saudi Arabia and Morocco.’

SaÃ¯d is fluent in French and Arabic, and has conversational Spanish. He has worked at Austrade since 2011.

resources. The reform allows for several hydrocarbon investment contract models that will affect investment in Mexico’s oil and gas resources.42 Mexico is pushing for foreign investment, and this has led to BHP Billiton, Woodside and WorleyParsons entering the market in the last six months. Austrade has provided all three companies with market intelligence and high-level introductions to relevant stakeholders.

In Peru, Austrade provided tailored research, facilitated meetings with government authorities, and organised visit programmes that have led to a number of companies establishing a presence or investing in the market. In May 2015, Austrade held an oil and gas seminar in Peru to promote Australia’s capabilities in oil and gas, and show that it could be an ideal partner. Not only was

there excellent attendance, but the feedback after the event was positive and highlighted the need for similar events in the future.

Brazil’s oil industry is rapidly growing and is expected to be one of the largest suppliers of conventional oil in developing regions, with its new oil sources in deepwater fields. Austrade has provided high-level assistance to Australian companies engaging with Petrobras, the dominant firm in the market, as well as market intelligence to Karoon Energy International and WorleyParsons.

42 EY 2014, ‘Mexico enacts sweeping energy reform affecting the oil and gas industry’, February.

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Working across government Austrade provides global and commercial perspectives to inform the policy advice and economic insights of Australian, state and territory government agencies. Austrade’s unique perspective is gained from its international market presence, economic research and analysis, firm-level contacts and commercial knowledge, and active partnerships with other government agencies and industry stakeholders.

Austrade has a number of formal, strategic partnerships and works collaboratively with other agencies and organisations. This approach helps to increase Austrade’s reach into the business community and leverages external resources, knowledge and skills to ensure effective outcomes for the Australian business community and Australia’s economic prosperity.

Austrade also strategically engages with key industry associations and chambers of commerce and industry, particularly those that operate in sectors where Australia has a comparative advantage.

Engaging with government stakeholders

Austrade maintains close and productive working relationships with agencies within the Foreign Affairs and Trade portfolio, coordinating international engagement and agency activity to achieve broad portfolio outcomes. Austrade also maintains close working relationships with a number of other Australian Government agencies, including the Department of the Prime Minister and Cabinet, Treasury, the Department of Agriculture, the Department of Education and Training, the Department of Immigration and Border Protection, the Department of Industry and Science, and the Department of Infrastructure and Regional Development.

Austrade convenes or manages a number of forums that provide avenues for consultation and coordination between state and territory governments on trade, investment, education, and tourism policy issues.

Trade and investment

Trade and Investment Ministers’ Meetings were held twice in 2014-15, and were chaired by the Minister for Trade and Investment. The meetings were attended by counterpart state and territory trade and investment ministers and covered a range of cross-jurisdictional trade and investment issues. The ministers agreed to continue collaboration on activities and outreach to promote the use of the North Asia free trade agreements by Australian businesses, as well as an action plan to address the key impediments to investment within and across jurisdictions.

The Senior Officials Trade and Investment Group, which is chaired by Austrade, met twice in 2014-15. The group implements decisions from the Trade and Investment Ministers’ Meetings and helps to improve coordination between the Australian Government and state and territory governments. It also provides strategic direction to the operationally focused National Trade Working Group and the National Investment Advisory Board.

The National Trade Working Group is a key mechanism for Austrade to plan and report on federal, state and territory international trade development, as well as share knowledge and intelligence on trade craft, export opportunities and offshore activities. The group met twice in 2014-15. It focused on aligning efforts where market and industry priorities intersect, as well as coordinating free trade agreement outreach and joint business missions.

100 Australian Trade Commission Annual Report 2014-15

The group helps provide a more coordinated approach to delivering whole-of-government benefits to businesses looking to develop international markets.

Austrade chairs the National Investment Advisory Board, which also comprises senior representatives from state and territory investment promotion agencies. The group met twice in 2014-15. Priorities for the board this year were to continue building the pipeline of investment opportunities across Australia that are ready to be introduced to overseas investors. The board also supported taking a coordinated approach on the investment component of events such as Australia Business Week in India and the forthcoming Northern Australia Investment Forum; and identifying and addressing impediments to investment to improve Australia’s strengths as an investment destination.

Education

The State International Education Marketing Forum, chaired by Austrade, met quarterly in 2014-15. Along with Austrade, it comprises state and territory agencies responsible for promoting international education and training. The purpose of this forum is to provide greater alignment and cooperation in strategies and market activities. It encourages an exchange of information on relevant promotional priorities and strategies to coordinate approaches to and maximise outcomes for individual governments and the sector overall. Points of discussion during 2014-15 included an Australian International Education2025 update, current and emerging social media trends, an Australian Global Alumni Network update by the Department of Foreign Affairs and Trade, market reports from Myanmar and China, and a presentation from Study Adelaide on its Qingdao campaign—a social

media campaign and competition held in China to raise awareness of studying in Adelaide.

During the year, Austrade worked closely with the Department of Education and Training on the development of the draft National Strategy for International Education, which was launched by the Hon Christopher PyneMP, Minister for Education and Training, in April2015. This strategy provides national direction for the sustainable development of international education and training in Australia, and Austrade contributed to sections that dealt with attracting more of the world’s students and researchers to Australia, and to marketing Australia as a high-quality provider of education and training services.

Austrade also participated in other national forums throughout the year, including quarterly meetings of the Education Visa Consultative Committee, which is chaired by the Department of Immigration and Border Protection. This committee allows members of the education sector to engage with government officials on student visa issues and receive updates from other government agencies, such as Austrade. In addition, Austrade also contributed to the department’s review of streamlined visa processing.

Tourism

Austrade is a member of, and provides secretariat services to, the Tourism Ministers’ Meetings, which were held twice during the year. Australian, state and territory tourism ministers and the New Zealand tourism minister discussed strategic policy issues and implementation of the Tourism2020 strategy. The tourism ministers are supported by ASCOT. Tourism industry stakeholders also provided an active voice at the meetings, with chairs from the four key industry

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associations—the Tourism and Transport Forum, the National Tourism Alliance, the Australian Regional Tourism Network and the Australian Tourism Export Council—attending. The parties worked together on key reforms in the Tourism2020 Implementation Plan (2015-2020) that will enable the industry to reach the 2020Tourism Industry Potential growth scenario.

The Australian Standing Committee on Tourism (ASCOT), chaired by Austrade, develops, coordinates and considers tourism policies, providing advice and making recommendations to tourism ministers. ASCOT has responsibility for implementing the National Long-Term Tourism Strategy and updating the Tourism2020 strategy. It met twice during the year.

The Tourism Access Working Group provides a forum for senior ministers and industry stakeholders to discuss strategies to support the tourism transport environment and foster growth of the tourism sector. A key focus for the group is maintaining a comprehensive and integrated approach to the needs of the Australian tourism industry, and considering transport access, infrastructure planning and policy development. It met once during 2014-15 and was co-chaired by the Hon Andrew RobbAOMP, Minister for Trade and Investment, and the Hon Warren TrussMP, Minister for Infrastructure and Regional Development. The meeting focused on strategic tourism access issues and provided the industry with an opportunity to inform the Government’s deregulation agenda. Senator the Hon Michaela Cash, Assistant Minister for Immigration and Border Protection, and the Hon Steven CioboMP, the then Parliamentary Secretary to the Treasurer, also attended the working group to inform the tourism stakeholders about portfolio initiatives such as visas, passenger facilitation, and border taxes and charges.

A commitment was made to conduct bilateral negotiations at the next International Civil Aviation Organization Air Services Negotiation Event, with markets identified by members as priorities. Relevant government agencies also agreed to provide information on the availability and use of capacity entitlements; investigate the feasibility of completing and submitting passenger departure cards electronically; and support for industry to make representations to the joint review of border fees, charges and taxes.

The Tourism Research Committee met twice in 2014-15 to consider implementation and operational changes to national surveys and Tourism Research Australia’s modelling, as well as collaborative research opportunities. The committee monitors service-level agreements between Tourism Research Australia and the state tourism organisations. The Tourism Research Committee is made up of officials from Austrade, Tourism Australia and the state tourism organisations. The Australian Bureau of Statistics and the New Zealand Ministry of Business, Innovation and Employment were invited as observers.

Supporting new policy initiatives

During 2014-15, Austrade developed various government policy initiatives, and supported others, including contributions to several white papers.

New complying investor visa framework

In October 2014, the Government announced that it would introduce a new complying investment framework for the Significant Investor Visa (SIV) and a new Premium Investor Visa (PIV) as part of its broader competitiveness agenda. Austrade was given the role of nominator for

102 Australian Trade Commission Annual Report 2014-15

the SIV, joining state and territory governments, which already have a nominating role. It was also announced that Austrade would develop the complying investment framework for the SIV and PIV, and be the sole nominator for the PIV.

The SIV enables an applicant to obtain permanent residency after investing $5million in complying areas over four years. One of the Government’s key objectives for the changes to the SIV was to see greater investment into areas where it can make a material difference, such as innovation and commercialisation of high-quality Australian research and development.

The PIV offers a more expeditious pathway to permanent residency, requiring $15million of complying investment over 12months. The PIV will be an invitation-only programme, which aims to attract those with entrepreneurial talent and skill to settle in Australia and contribute to Australia’s economic future. Through the SIV and PIV programmes, the Government hopes for diversification of the application source countries, and attraction of immigrants able to invest wealth and entrepreneurial skill in Australia’s economy.

Since the new policy announcement, Austrade and the Department of Immigration and Border Protection have consulted extensively with stakeholders on the design of the new complying investment framework for the SIV and PIV. Austrade invited two rounds of written public submissions on possible design options, with 68submissions received in the first round, and 91in the second round. These consultations informed design options, while a further round of formal consultations and written submissions informed Austrade’s final recommendations for the Minister for Trade and Investment. A new complying investment framework for the SIV and the new PIV come into effect from 1July 2015.

Input into government papers

During 2014-15, Austrade contributed to cross-government initiatives including:

âº the White Paper on Developing Northern Australia—Austrade worked with the Northern Australia White Paper Taskforce to identify ways to unlock the region’s commercial potential, and help overcome barriers to Northern Australia’s trade, investment, international education and tourism performance. Austrade participated in this process by making a submission in its own right and placing an employee on a short-term secondment to the Department of the Prime Minister and Cabinet to work with the taskforce.

âº the Agricultural Competitiveness White Paper—Austrade provided information about attracting foreign direct investment, assisting food and agribusiness services and technology exporters, and developing and maintaining international markets.

âº the Rethink tax: Better tax, better Australia discussion paper—Austrade took part in an interdepartmental committee to frame the paper and was also part of the Department of Foreign Affairs and Trade Tax Policy Discussion Group, which provides input to the tax reform process.

âº the Energy White Paper—Austrade provided advice on improving the foreign direct investment attraction process for the energy and resources sector.

âº the Australian Customs and Border Protection Service’s Trusted Trader programme.

âº the Industry Productivity and Competitiveness Agenda.

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Steering groups and partnership agreements

Austrade and the Department of Immigration and Border Protection established a senior-level steering group to explore opportunities to further drive Australia’s economic prosperity across the visitor economy, international education and tradeable sectors, and by winning additional productive foreign investment. The group looks to balance the economic opportunity with the integrity of Australia’s immigration system. The group met twice in 2014-15 to cooperate on key areas of interest such as visitor visa reform and the design and implementation of the Significant Investor Visa and Premium Investor Visa programme changes.

Austrade and the Department of Agriculture convene an executive steering group meeting to collaborate on shared areas of policy and programme interest, including the development of Australia’s agricultural industries through trade and investment promotion, participation in national and international agriculture-related events, and sharing ideas and perspectives on policy issues. Matters discussed included food branding, promotion of Australia’s food safety systems, and the trade and investment aspects of the Government’s Agricultural Competitiveness White Paper. The group met three times in 2014-15.

Austrade has a formal partnership agreement in place with the Department of Industry and Science for work on trade, investment and international education priorities to ensure areas of potential overlap are addressed at a senior level. The agreement strengthens collaboration between the agencies. Two meetings were held in 2014-15, where the full spectrum of the business life cycle—from conception to developing export markets—was covered across sectors, including advanced manufacturing,

resources and energy, skills, and accessing global supply chains. Austrade also worked with key industry portfolio bodies such as CSIRO and Geoscience Australia.

Coordinating ministerial business missions

Business missions are an important tool in the Government’s economic diplomacy agenda, and they support the promotion of trade, investment, education and tourism around the world. Last financial year, a central ministerial business missions unit was established within Austrade, and in August 2014, the Prime Minister agreed that Austrade should be the lead agency for coordinating the Government’s overall minister-led business missions programme. Austrade is well placed to take on this role—it already managed the Government’s online minister-led business missions register, which provides companies with the opportunity to express interest in participating in missions, and has extensive business contacts and experience in planning and executing overseas missions. The unit manages smaller, targeted missions as well as large Australia Week country promotions. Austrade works with other federal government agencies and state and territory governments on a whole-of-government presence overseas. This builds on the work that is being undertaken by the Senior Officials Trade and Investment Group (see page 99).

Austrade also plays a pivotal role in supporting and following up on business elements of the mission programmes, which highlight emerging opportunities for Australian exporters. After a North American mission to New York and Houston in mid-2014, Austrade developed an international health initiative that examined health export services, research and development opportunities, and healthcare investment.

104 Australian Trade Commission Annual Report 2014-15

From March 2014 to 30June 2015, Austrade organised 21minister-led business missions involving 1,158companies and 1,520registered delegates.

During 2014-15, Austrade coordinated 14minister-led business missions involving 517companies and 650 registereddelegates. More information on the missions held throughout the year is provided below.

Singapore

In August 2014, a business mission to Singapore was a valuable opportunity for Australia’s aerospace and aviation sector to connect with global companies in this aviation transit hub. Singapore is also home to an aviation services, manufacturing and innovation centre. The mission presented strong prospects for the participating Australian component suppliers and service providers to tap into Asian-centric supply chains. The programme included site visits to leading companies in the global aerospace industry, networking with the Singapore business community, and an aviation sector roundtable. The mission culminated in the Singapore- Australia Joint Ministerial Council meeting, at which there was ministerial agreement to include aviation in further ministerial discussions.

In June 2015, the Prime Minister, the Hon Tony AbbottMP, visited Singapore, accompanied by the Hon Andrew Robb AO MP, and led a business delegation, to further enhance Australia-Singapore relations with the signing of the Comprehensive Strategic Partnership by MrAbbott and the Prime Minister of Singapore, MrLee Hsien Loong. Mr Abbott and Mr Robb were also joined by the Premier of Queensland, the Hon Annastacia PalaszczukMP, the Premier of Western Australia, the Hon Colin BarnettMP, and the Chief Minister of the Northern Territory,

the Hon Adam GilesMLA, at a high-level investment roundtable on Northern Australia. Delegates participated in a Singapore economic and business briefing on the Comprehensive Strategic Partnership and ASEAN Economic Community, and attended the 35th Singapore Lecture by MrAbbott on ‘Our common challenges: strengthening security in the region’.

India

In September 2014, MrAbbott led a business mission to India. Accompanied by MrRobb, the visit was instrumental in improving bilateral economic and trade interests between the two countries, and setting an ambitious agenda for negotiation of a free trade agreement. During the visit, the two countries concluded the memorandum of understanding on Cooperation in the Peaceful Uses of Nuclear Energy, which will allow Australia to export uranium to India. Australia and India also renewed a memorandum of understanding on water management, including Australian expertise used in managing the Murray-Darling Basin, which will now be used on India’s Ganges River. Other results included joint cooperation in sport; cooperation on technical vocational education and training that coincided with the launch of the New Colombo Plan; and an Australian international education conference focusing on research collaboration between universities.

Austrade also played a major role in the delivery of the Australia Business Week in India programme in January 2015. This mission is discussed in detail on pages 84-85.

In June 2015, the Hon Steven CioboMP, Parliamentary Secretary to the Minister for Trade and Investment, led an infrastructure and health- focused business delegation to Hyderabad. The visit built on the strong relationship

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established with the Chief Minister for Andhra Pradesh during Australia Business Week in India, and reinforced opportunities arising from the Australia-India Comprehensive Economic Cooperation Agreement negotiations for the services sectors.

The Hon Andrew RobbAOMP, Minister for Trade and Investment, speaks to attendees at an Australia Business Week in India gala reception in Mumbai, January 2015. Photo: Graham Crouch.

Latin America

In December 2014, a business mission to Latin America commenced in Rio de Janeiro, Brazil, before travelling to Colombia for a two-day programme and then on to Chile for the inaugural Australia-Chile Economic Leadership forum. Feedback from mission participants was positive, with most reporting the visit provided them with access to a useful range of contacts, with new linkages or collaborations to be progressed in the future.

New Zealand

In February 2015, MrRobb led an infrastructure business mission of delegates to Christchurch and Auckland. The purpose was to explore opportunities for infrastructure supply, delivery and investment in New Zealand, and to strengthen the bilateral economic and trade relationship. An initial outcome of the mission

was an agreement to explore the practicality of a joint pipeline of Australian and New Zealand infrastructure investment opportunities, given the similarity of Australia and New Zealand’s infrastructure investment agendas. To capitalise on this mission, Infrastructure Partnerships Australia will lead the testing of the concept with the business community.

Canada

In March 2015, MrRobb led a business mission to Toronto to participate in the Prospectors and Developers Association of Canada conference. In collaboration with Austmine, the programme explored opportunities for the supply of mining equipment, technology and services, and provided participants with an understanding of Indigenous issues in the mining and resources sectors in Canada and Australia. An initial outcome was an agreement to progress collaboration between Indigenous leaders in both countries.

Middle East

In April 2015, MrRobb led an Australian mission of senior business and education representatives to the United Arab Emirates, Kuwait and Saudi Arabia. The visit coincided with Austrade’s third annual Australia Unlimited Middle East—North Africa promotion, as well as the International Conference and Exhibition on Higher Education in Riyadh, in which 29Australian universities participated. The programme demonstrated Australia’s capabilities across a range of sectors, and highlighted investment opportunities in Australia to significant potential investors in each location.

106 Australian Trade Commission Annual Report 2014-15

Papua New Guinea

In May 2015, MrRobb led a business mission to Papua New Guinea (PNG). Participants were drawn from the resources, infrastructure, services and agricultural sectors. The visit allowed for delegates to expand and deepen their existing business relationships in PNG, and for MrRobb to showcase Australia’s strengths and capacity in the infrastructure, mining and resources sectors. The visit coincided with the 31stAustralia-PNG Business Forum, jointly organised by the Australia-PNG Business Council and the Business Council of Papua New Guinea. MrRobb was the keynote speaker.

Philippines

Also in May 2015, MrRobb led a business mission of senior representatives from companies with an infrastructure focus and interests in the Philippines. This visit underlined Australia’s commitment to expanding business-to-business links with the Philippines and to economic diplomacy in the country. Participants were able to assess infrastructure partnership opportunities, and MrRobb advocated for economic reforms that will help drive further foreign investment and economic growth in the Philippines.

Supporting visits by foreign government officials

As well as providing support for overseas visits by Australian ministers, Austrade continued to support visits to Australia by a diverse range of foreign government officials throughout the year. These visits included:

âº G20 Guest of Government visits by HisExcellency FranÃ§ois Hollande of France, Chancellor Angela Merkel of Germany, Prime Minister the RtHon David CameronMP of the United Kingdom, and Prime Minister Matteo Renzi of Italy

âº Guest of Government visits by Prime Minister the Hon Narendra Modi of India, Prime Minister His Excellency Nguyen Tan Dung of Vietnam, Foreign Minister Linas LinkeviÄius of Lithuania, HMKing HaraldV and Queen Sonja of Norway, and MrHu Chunhua, Party Secretary of Guangdong Province, China. Austrade arranged a substantial business forum coinciding with the visit by Vietnam’s Prime Minister, including Australian business invitees for a state dinner and a series of one-on-one meetings with six large Australian investors in Vietnam

âº Joint Trade Committee meeting visit by Malaysian Minister for International Trade and Industry, the Hon Mustapa Mohamed, and an accompanying business delegation. Austrade worked with the Department of Foreign Affairs and Trade and the Australia-

minister-led business missions organised by Austrade since March 2014

1,158 companies were represented on the missions

1,520 delegates registered to participate in the missions

509 companies have registered on Austrade’s online minister-led

business missions register

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Malaysia Business Council to arrange a business roundtable for the delegates and contributed to briefing material for the HonAndrew RobbAOMP, Minister for Trade and Investment, at the committee meeting

âº industry capability visit by Morocco’s Minister for Housing and City Policy, Mohamed Nabil Benabdallah, to Melbourne, Sydney and Canberra to examine Australia’s expertise in green building and planning

âº high-level visits by Vietnam’s Minister for Natural Resources and Environment; the Governor of Heilongjiang Province, China; the Director-General of the Communist Party in Fujian Province, China; and Indonesia’s Minister for Marine Affairs and Fisheries

âº special visitor programme for DrLe Hong Son, the Vice-Chair of the Hanoi People’s Committee, Vietnam

âº a delegation from the Saudi Arabian Ministry of Commerce and Industry to discuss how Australia assists trade facilitation, industrial development and consumer protection. Meetings were held with Austrade and a range of agencies across government

âº AFC Asian Cup-associated visits by an education delegation from Brazil, a rail delegation from Gulf Cooperation Council countries, and a range of investors. Austrade also supported a visit by Elizabeth Lehmann, CEO of Chile’s Inversiones Corso.

Services to government

Austrade’s CEO reports to the minister responsible for the trade portfolio. Austrade provided services to the Minister for Trade and Investment and the Parliamentary Secretary to the Minister for Trade and Investment throughout the year, including through the provision of a

departmental liaison officer to the office of the Minister for Trade and Investment.

The Hon Andrew RobbAOMP held the position of Minister for Trade and Investment for the duration of the reporting period. In December 2014, the Prime Minister announced the appointment of the Hon Steven CioboMP as Parliamentary Secretary to the Minister for Trade and Investment. He was sworn into the position on 23December 2014. MrCiobo also holds the position of Parliamentary Secretary to the Minister for Foreign Affairs and was Parliamentary Secretary to the Treasurer until 23December 2014.

Austrade reported on its progress towards achieving the Government’s objectives through regular reports and briefing material provided to the Minister for Trade and Investment and the Parliamentary Secretary to the Minister for Trade and Investment. Austrade officers also met with the Minister and the Parliamentary Secretary, as well as their respective office staff, to give context to written briefs and discuss specific issues when required. In 2014-15, Austrade produced 194 ministerial briefs and 204 ministerial submissions. Austrade also received 317 items of ministerial correspondence requiring a response, while a further 420 items of correspondence were processed for information.

Parliamentary inquiries and briefings

During the year, Austrade appeared before, or provided submissions to, the following parliamentary committees or inquiries:

âº Joint Select Committee on Northern Australia, Pivot North Inquiry into the Development of Northern Australia: Final Report, released September 2014—Austrade provided a submission in March 2014 as part of the Foreign Affairs and Trade portfolio

108 Australian Trade Commission Annual Report 2014-15

âº Joint Standing Committee on Foreign Affairs, Defence and Trade inquiry into trade and investment relationships with countries of the Middle East—Austrade appeared before a public hearing with the Department of Foreign Affairs and Trade (DFAT) in November 2014

âº Foreign Affairs, Defence and Trade References Committee report on the Korea-Australia Free Trade Agreement—Austrade provided a submission in November 2014

âº Defence subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade inquiry into government support for Australian defence industry exports—Austrade provided a submission and appeared at the subsequent hearing in March 2015

âº Foreign Affairs, Defence and Trade References Committee inquiry into the delivery and effectiveness of Australia’s bilateral aid program in Papua New Guinea—Austrade provided a submission in March 2015

âº Senate Economics References Committee inquiry into the future of Australia’s automotive industry—Austrade appeared at the hearing and made a statement before answering questions in April 2015

âº Joint Select Committee on Northern Australia inquiry into opportunities for expanding the aquaculture industry in Northern Australia— Austrade provided a submission in May2015

âº Joint Select Committee on Trade and Investment Growth inquiry into businesses’ experience in utilising Australia’s free trade agreements—Austrade and DFAT provided a joint submission in June 2015.

Attached agency agreements

Austrade administered a number of service-level agreements with attached Australian Government agencies for the delivery of property and administrative support in overseas locations. In most cases, service-level agreements were in place in Austrade-managed consulates-general. They included agreements with:

âº the Department of Foreign Affairs and Trade— in Ulaanbaatar and Houston

âº the Department of Immigration and Border Protection—in Dubai and Auckland

âº the Department of Agriculture—in Dubai âº the Australian Federal Police—in Dubai âº AusFilm—in Los Angeles.

Austrade also employed staff on behalf of a number of state governments to deliver a mutually agreed business plan supporting each state’s trade, investment and education promotion activities in respective markets. These included agreements with:

âº NSW Trade & Investment—trade and investment directors in Jakarta, Kuala Lumpur, London, Seoul and Singapore

âº South Australian Department of State Development—a Business Development Manager in Hong Kong and senior investment managers in Shanghai and Mumbai

âº Tasmanian Department of State Growth— Senior Business Development Manager in Shanghai

âº Victorian Department of Economic Development, Jobs, Transport and Resources—an Education Services Manager in Bogota.

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Austrade delivers services to, and works with, these agencies and departments overseas to ensure that government efforts, at Australian and state and territory levels, are coordinated and targeted.

Promoting Australia through online channels, media and marketing Austrade’s marketing, media and online teams support the agency in achieving the Government’s outcomes. The following pages explain how each area contributes to the promotion of Australia as a trading partner, destination for international study or foreign investment, and to strengthening Australia’s tourism industry. This work underpins the value that Austrade provides to Australian businesses, international investors, and the education and training and tourism sectors.

Austrade online

In 2014-15, there were 1,831,177 visits to Austrade’s website, www.austrade.gov.au, and 5,722,586 page views. Around 40per cent of Austrade’s website traffic is from overseas users seeking information about Australian products and services, or investing in Australia.

Austrade undertook a significant update to all its country profiles during the year, highlighting particular opportunities in-market for Australian businesses. There are more than 200profiles on www.austrade.gov.au. It is the most accessed area of the website, receiving 831,146 views during the year. A number of significant industry capability reports, which highlight Australia’s capabilities, were added to the website, and included digital multimedia formats for industries such as processed food, oil and gas, aged care and agribusiness.

In March 2015, Austrade introduced the Economics at Austrade blog by its Chief Economist, Mark Thirlwell. It includes analyses of Australian and international economic trends and can be found at www.austrade.gov.au/economics.

In 2014-15, Austrade published to its website:

âº 117 Investor Update articles, which provide information on the investment climate in Australia

âº 65 Latest from Austrade stories, covering issues and initiatives important to Australian businesses and Austrade’s stakeholders

âº 17 success stories (also known as case studies) on the achievements of Australian exporters and international investment in Australia

âº 40 promotional videos on the Austrade YouTube channel.

Media and social media

Austrade works to maximise the role that traditional and social media play in promoting Australian businesses in international markets, Australia’s attractiveness as a destination for productive foreign direct investment, Australia’s international education sector and Australia’s tourism industry credentials.

Its media team coordinates requests from the media, manages media issues and provides high-level media support to Austrade’s international network in its promotion and marketing campaigns offshore, particularly through placement of stories and opinion pieces in mainstream media. The media team provides Austrade with editorial and media management services, as well as a daily media clipping service to the offices of the Minister for Trade and Investment and the Parliamentary Secretary to the Minister for Trade and Investment, and to Austrade staff.

110 Australian Trade Commission Annual Report 2014-15

In 2014-15, Austrade supported visits by the Minister for Trade and Investment to India, the Philippines, Papua New Guinea, Canada, New Zealand, Singapore, the United States and the Middle East; and visits by the Parliamentary Secretary to the Minister for Trade and Investment, including his speeches, remarks and media releases. The media team also worked closely with Austrade staff in India to maximise media coverage of the Australia Business Week in India mission, both in India and Australia, in January 2015.

Social media assists Austrade to build brand equity and disseminate information about Australian capabilities to targeted international audiences. Austrade has an official Twitter account and market-specific Twitter accounts, as well as industry-specific LinkedIn accounts and Facebook pages. A popular tweet from the year was about Austrade’s Why Australia—2015 Benchmark Report. It is shown in Figure 19.

Austrade social media also figured prominently i n Australia Business Week in India, Australia’s

largest-ever trade mission to India. A dedicated LinkedIn group was created for business delegates. It proved an important communication tool, allowing stakeholders to network before, during and after the event, ensuring that relationships developed during the mission could continue to be nurtured.

Figure 19: Popular tweet from Austrade’s Twitter account in 2014-15

Australia has the 13th largest economy, yet only has 0.3percent of the world’s population ow.ly/3nM5Wk

12 Jan 2015 55

Brand Australia programme

The Brand Australia programme provides a strategic, coordinated approach to supporting Australia’s competitiveness. Competition for trade, investment, tourism, talent and influence has intensified globally, and a strong international reputation supports decision-making about doing business with a particular country.

Australia’s nation branding presents a confident, contemporary and consistent vision of its strengths and potential that supports Australian business. Exporters, start-ups, small and medium-sized enterprises, education institutions, students and citizens whose paths to global

1.8M+ visits to Austrade’s website

40% of website traffic is from overseas

5.7M+ page views of Austrade’s website

200+ country profiles on Austrade’s website

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business can benefit from their ‘Australian-ness’ will all be better placed with a consistent and professional representation of Australia.

In 2014-15, Austrade continued to encourage the use of the Australia Unlimited brand by other government agencies and industry bodies as part of their international marketing activities and at major international events. The brand featured prominently during Australia Business Week in India in January 2015, as well as at more than 120associated events.

The Australia Unlimited brand was also used consistently across international events, including Investing in African Mining Indaba in South Africa, Australia Unlimited MENA2015 in the Middle East and North Africa region, SIAL China (Asia’s leading food and beverage exhibition), and the International Mining and Resources Conference in Melbourne.

Apart from Austrade, other government agencies that have used the Australia Unlimited brand include the Department of Foreign Affairs and Trade, the Defence Materiel Organisation and the Commonwealth Scientific and Industrial Research Organisation. The brand is trademarked in most cases until 2020-21.

Around 70 new stories profiling Australians and Australian achievements were also made available under a Creative Commons licence on a number of digital platforms, including www.australiaunlimited.com. Successful campaigns on Twitter, Facebook and LinkedIn have seen the programme’s number of social media followers increase to nearly 15,000.

In 2014-15, the Brand Australia programme has undertaken a number of collaborative campaigns to expand the offshore promotion of Australia’s commercial, intellectual and creative credentials. These include partnerships with

the Foundation for Young Australians; Future Unlimited (Australia’s international education brand); and the Department of Foreign Affairs and Trade for the Australia Day2015 Future Chasers campaign, which celebrated the importance and global impact of Australia’s young people, as well as its international alumni.

In December 2014, the Australia Unlimited Showcase of Food Export Excellence campaign profiled the export capability of a range of Australia’s premium food producers, and supported Tourism Australia’s ‘Restaurant Australia’ campaign by highlighting a number of the country’s best food tourism destinations.

The Brand Australia programme’s assets, including its visual brand mark and digital publishing platforms, continue to support the whole-of-government approach to enriching and enhancing Australia’s international reputation as a global business partner and citizen, and its objective of increasing the nation’s economic prosperity through global engagement.

Australian Export Awards

The Australian Export Awards programme, presented by Austrade and the Australian Chamber of Commerce and Industry, delivered its 52nd awards in 2014, making it one of the longest-running business awards series in Australia.

The national awards ceremony, held in Sydney in November 2014, was hosted by the Hon Andrew RobbAOMP, Minister for Trade and Investment. During the evening, 74national finalist companies were honoured before an audience of 530business and government representatives. The finalist companies were competing for 12national awards across a range of industry sectors, including a new awards

112 Australian Trade Commission Annual Report 2014-15

category for online sales, to capture this growing area for Australian exporters.

Earlier in the day, the national finalists attended a ‘masterclass’ that examined global growth sectors and the opportunities that these present for Australian exporters. This was followed by a networking lunch attended by finalists and sponsors.

In 2014, the Commonwealth Bank marked 27years as a sponsor of the Australian Export Awards; the Export Finance and Insurance Corporation (Efic) marked 21years; and the Australian Made Campaign celebrated 15 years of support.

The finalists, who progressed from the eight state and territory export award programmes, were responsible for more than $3.1billion in export sales in 2013-14, and provided employment to more than 41,000people.

To help promote gender balance among the awards’ finalists, the Australian Export Awards team worked with the Women in Global Business programme on initiatives to encourage more women to apply for the awards, including a webinar targeting women-led businesses.

GP Graders, a Victorian company that manufactures cherry-grading machinery, was recognised as the overall winner and recipient of the Australian Exporter of the Year award for 2014, as well as the Manufacturing award.

The 52nd Australian Export Awards winners were:

Australian Exporter of the Year Award GP Graders (VIC)

Agribusiness Award Australian Agricultural Company (QLD)

Business Services Award Cardno (QLD)

Creative Industries Award The Creature Technology Company (VIC)

Education and Training Award Charles Darwin University (NT)

Environmental Solutions Award TTG Transportation Technology (NSW)

Health and Biotechnology Award SDI Limited (VIC)

Information and Communication Technology Award Opmantek (QLD)

Manufacturing Award GP Graders (VIC)

Minerals, Energy and Related Services Award Blast Movement Technologies (QLD)

Online Sales Award Halfbrick (QLD)

Regional Exporter Award Bega Cheese (NSW)

Small Business Award Turbosmart (NSW)

Pictured: The Hon Andrew Robb AOMP, Minister for Trade and Investment, presenting the Australian Exporter of the Year award to Stuart Payne, Director, GP Graders, at the 52ndAustralian Export Awards in Sydney, November2014. Photo: Life is Now Photography.

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Outcome 1

Programme 1.2: Programmes to promote Australia’s export and other international economic interests

Objective Administer programmes that support Australian business engagement in international business, and provide an incentive for small to medium business to enter into export and grow to become sustainable exporters.

Deliverables and key performance indicators Tables 5 and 6 summarise the results for programme1.2 against the deliverables and key performance indicators set out in Austrade’s 2014-15 Portfolio Budget Statements.

Programme 1.2 highlights

âº 94percent of grant recipients under the Export Market Development Grants (EMDG) scheme reported that the receipt of a grant supported their business to become a more sustainable exporter.

âº A survey conducted for the 2015 review of the EMDG scheme showed that overall exports by EMDG firms were estimated to have increased by 75 per cent from 2012-13 to 2013-14.(a)

âº 3,195 EMDG applications were received in 2014-15, an increase of 18percent on the previous year.

âº There were 3,137 EMDG recipients in 2014-15, an increase of 28percent on the previous year.

âº Austrade supported the legislated review of the EMDG scheme, undertaken by Michael Lee, with the final report provided to the Minister for Trade and Investment on 30 June 2015.

(a) The survey conducted for the 2014-15 Annual Report was part of a detailed periodical review of the EMDG scheme.

114 Australian Trade Commission Annual Report 2014-15

Table 5: Summary of results for programme 1.2 deliverables

Deliverables

Export Market Development Grants scheme

Administration of the Export Market Development Grants scheme, providing partial reimbursement for expenditure on eligible export promotion activities.

Austrade administered the Export Market Development Grants (EMDG) scheme in accordance with the Export Market Development Grants Act 1997, maintaining a strong focus on risk management and fraud control.

PAGE

124

Number of grant applications.

A total of 3,195 EMDG applications were received in 2014-15, an increase of 18per cent over the 2,715 applications received in 2013-14, and within the budgeted target of 3,000 to 3,500.

PAGE

117

Number of grant recipients.

There were 3,137 EMDG recipients in 2014-15, an increase of 28per cent over the 2,445 recipients in 2013-14, and within the budgeted target of 2,800 to 3,300. PAGE 117

Asian Business Engagement Plan

Administration of the Asian Business Engagement Plan, which is a competitive, merit-based grant programme, in accordance with the plan’s guidelines and the Commonwealth Grants Rules and Guidelines.

Austrade administered the Asian Business Engagement Plan for the reporting PAGE

year. The programme was closed on 30 June 2015.

126

Number of grant applications.

In 2014-15, there were 68 grant applications.

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Table 6: Summary of results for programme 1.2 key performance indicators

Key performance indicators

Export Market Development Grants scheme

Proportion of EMDG recipients reporting that the receipt of a grant supported their business to become a more sustainable exporter.

In 2014-15, Austrade’s Service Improvement Study found that 94percent of EMDG recipients indicated that the receipt of a grant supported their business to become a more sustainable exporter. This is the first year that this data is available.

Proportion of EMDG recipients reporting that the receipt of a grant enabled them to grow their international revenue.

A survey conducted for the 2015 review of the EMDG scheme showed that overall exports (a)

by EMDG firms were estimated to have increased by 75per cent from 2012-13 to 2013-14.

Asian Business Engagement Plan

Proportion of grant recipients reporting the receipt of a grant helped expand the capability of their organisation to assist members to access in-market business networks and develop new business relationships in Asia.

71.4percent of grant recipients surveyed reported positive outcomes,(b) with 28.6per cent reporting that it was too early to determine outcomes at this stage.

(a) The survey conducted for the 2014-15 Annual Report was part of a detailed periodical review of the EMDG scheme.

(b) These results reflect the outcomes from single-year grant recipients in the 2013-14 grant round, as multi-year grant projects for 2013-14 and grant projects from the 2014-15 grant year had not concluded at the time of reporting. Of the 16 organisations surveyed, 87.5per cent provided responses.

116 Australian Trade Commission Annual Report 2014-15

Export Market Development Grants scheme The Export Market Development Grants (EMDG) scheme is a key Australian Government financial assistance programme for small to medium-sized businesses. It provides an incentive for aspiring and growing export-ready businesses to increase their international marketing and promotion expenditure to achieve more sustainable international sales, and also provides businesses with an opportunity to enter and embed themselves in global value chains, which encompass 80per cent of global trade.

Review of the EMDG scheme

In December 2014, in accordance with section106A of the Export Market Development Grants Act 1997 (EMDG Act) (as amended), the Hon Andrew RobbAOMP, Minister for Trade and Investment, announced the appointment of Michael Lee, former Chief Executive Officer of Zip Industries, to conduct a review of the EMDG scheme.

The review was completed in June 2015 and a report was provided to the Minister for Trade and Investment on 30 June 2015. In accordance with the provisions of the EMDG Act, the Minister is required to present the report to Parliament within 15 sitting days of that date, when the outcomes of the review will be announced.

The review provided a comprehensive examination of the effectiveness of the EMDG scheme, and focused on a number of areas, including whether the EMDG scheme, as currently structured, was effective in:

âº increasing the number of businesses that develop into new exporters

âº increasing the number of businesses that achieve sustainability in export markets and generate additional exports

âº further developing an export culture in Australia.

The review took into account the scheme’s provisions, including the eligibility of individuals, businesses and organisations; products and services that applicants may seek to export; the export promotion expenses that applicants may incur and the adequacy of coverage of export promotional costs; and other scheme parameters.

The review also considered the need for:

âº simplicity in scheme rules âº limitations on compliance costs for applicants and administrative efficiency

âº scheme accountability, and the proper management of public money

âº consistency with overall government policy.

With these issues in mind, the review looked at whether the EMDG scheme should be extended and, if so, the period of extension, options for improved performance of the scheme, and options for funding scheme administration costs.

To assist with the review, public submissions were invited and made publicly available on the Austrade website, www.austrade.gov.au. In addition, existing Austrade and Australian Bureau of Statistics research was taken into consideration, including Austrade’s annual Service Improvement Study and client feedback data, as well as previous EMDG scheme reviews and a literature review of firms’ export promotional activities and their effects.

Two research studies, which built on previous similar studies carried out in 2008 and 2009, were also commissioned to inform the review, including an econometric study and a survey of the impact of the scheme on exporters and the Australian economy.

Part 02 / Report on performance. Outcome 1 - Programme 1.2 117

EMDG scheme performance

The number of EMDG applications received in 2014-15 increased by 18per cent, with 3,195grant applicants compared to 2,715applicants in 2013-14. This is most likely due to changes made by the Government in 2014 to enhance access to the scheme, following the allocation of an additional $50million to the scheme over four years commencing in 2013-14. The increase in applications may also be partly due to the boost to export prospects triggered by the fall in the Australian dollar that started in early 2013. In the previous year, grant applications had declined by 11per cent.

Table7 shows that a total of 3,137grants, worth $140.8million, were paid to EMDG recipients in 2014-15, an increase of 28per cent in grant numbers and 24per cent in the total value of grant payments compared to 2013-14. This outcome follows the reduced demand of 11.3percent in grant numbers and 5.6per cent in grant payments in 2013-14.

A total of 84grants, worth $4.8million, were made under the special ‘approved body’ category to non-profit export-focused industry bodies which, while not exporting themselves, undertake export promotion on behalf of their industry or membership. This category includes industry associations and regional tourism bodies, and also firms cooperating in joint venture-style marketing arrangements.

Table 7: Payments to EMDG recipients, 2010-11 to 2014-15

Variance 2013-14

2010-11 2011-12 2012-13 2013-14 2014-15 to 2014-15 (%)

Total grant recipients

4,306 2,993 2,757 2,445 3,137(a) +28

Value of grants ($million) 143.1 125.6 120.4 113.6 140.8(b) +24

(a) Includes 2,943 recipients for the 2013-14 grant year and 194recipients carried over from previous grant years.

(b) Includes the value of grants for the 2013-14 grant year of $130.3million, plus the value of 194grants from previous years and supplementary payments to grant recipients from previous years. A total of $140.8million was paid from the 2014-15 budget.

Although almost all grants are paid the year after applicants’ export promotion expenditure has been incurred (the grant year), in any financial year, there will be some grant payments that relate to previous grant years. To allow a comparison between the number of recipients and applicants relating to the same grant year, Table8 provides a profile of grants that were paid in 2014-15 to the 2013-14 grant year applicants only. A comparison with previous years is also provided.

118 Australian Trade Commission Annual Report 2014-15

Table 8: Profile of EMDG applicants and recipients, by grant year, 2009-10 to 2013-14

Variance

2009-10 2010-11 2011-12 2012-13 2013-14 2012-13 to

grant year grant year grant year grant year grant year 2013-14 (%)

Total grant applicants

4,585 3,277 3,045 2,715 3,195 +18

Assessed eligible grant demand ($million)

167.0 120.2 113.5 106.6 143.6 +35

First-time grant applicants

1,379 867 913 842 971 +15

Total grant recipients

4,128 2,874 2,643 2,332 2,943 +26

First-time grant recipients

1,111 662 685 632 793 +22

Value of grants ($million)

130.2 120.2 113.5 106.6 130.3 +22

Average grant ($) 31,531 41,818 42,950 45,708 44,270 -3

Median grant ($) 25,050 28,421 28,182 30,862 33,499 +9

Recipients from rural and regional areas(a)

1,029 631 562 478 441 -8

Value of exports generated by grant recipients ($billion)

4.6 3.2 3.1 2.8 3.9 +39

Employees of recipients

82,465 103,557 85,964 59,227 62,931 +6

(a) The methodology used in classifying grant recipients as ‘rural and regional’ has changed to a more accurate GIS-based system for this year’s report.

The average grant paid in 2014-15 to 2013-14 grant year recipients was $44,270 (down 3per cent) and the median grant was $33,499 (up 9per cent). The scheme continued to provide strong support to regional and rural Australia, with 441grants (15per cent) paid to businesses in those areas. While the EMDG scheme supports a range of business types, companies are the dominant category. In the 2013-14 grant year, 92.2per cent of EMDG recipients were in that category (Table9).

Part 02 / Report on performance. Outcome 1 - Programme 1.2 119

Table 9: EMDG recipients by business type, 2013-14 grant year

Number of Total grants

Business type recipients Percentage paid ($million)

Company incorporated in Australia 2,713 92.2 122.4

Individual 70 2.4 1.5

Partnership existing under Australian law 64 2.2 1.8

Approved body 60 2.0 3.6

Cooperative/association 19 0.6 0.6

Body corporate for public purpose 14 0.5 0.3

Approved joint venture 3 0.1 0.2

Total 2,943 100 130.3

Small exporters continue to be the largest category of EMDG recipients, with 72per cent of 2013-14 grant year recipients reporting annual income of $5million or less (Figure20), 72per cent reporting fewer than 20employees (Figure21), and 74per cent reporting export earnings of $1million or less (Figure22). A breakdown of EMDG recipients by state and territory is shown in Figure23 and Table10.

Figure 20: EMDG recipients by annual income, 2013-14 grant year

26.5%

26.2%

19.4%

12.4%

9.1%

6.4%

Up to and including $0.5m >$0.5m-$2m >$2m-$5m

>$5m-$10m >$10m-$20m >$20m

Figure 21: EMDG recipients by number of employees, 2013-14 grant year

31.6%

40.6%

17.1%

6.9%

3.7%

0 to 4 5 to 19 20 to 49

Note: Numbers do not add up to 100% due to rounding.

50 to 99 100+

120 Australian Trade Commission Annual Report 2014-15

Figure 22: EMDG recipients by annual export earnings, 2013-14 grant year

17.0%

56.8%

19.8%

4.0%

1.7% 0.7%

Nil Up to and including $1m >$1m-$5m

>$5m-$10m >$10m-$20m >$20m

Figure 23: EMDG recipients by state and territory, 2013-14 grant year

38.2%

28.7%

14.2%

8.8%

7.0%

1.7%

1.0% 0.4%

NSW VIC QLD WA SA TAS ACT NT

Table 10: EMDG recipients by state and territory, 2012-13 and 2013-14 grant years

State/territory 2012-13 grant year 2013-14 grant year

Recipients

Payments ($million) Recipients Payments ($million)

NSW 949 49.3 1,125 54.5

VIC 645 29.2 845 38.2

QLD 322 11.4 418 16.0

WA 188 7.9 259 11.2

SA 149 5.7 206 7.3

TAS 37 1.3 49 1.5

ACT 29 1.5 29 1.3

NT 13 0.4 12 0.3

National 2,332 106.6 2,943 130.3

Note: Some figures have been rounded.

Part 02 / Report on performance. Outcome 1 - Programme 1.2 121

By broad industry classification, the majority of EMDG recipients (64per cent) in the 2013-14 grant year were in service industries, with a further 31per cent in manufacturing and 5per cent in the primary sector (Figure24). Tourism, education and culture, and ICT services dominated among services recipients. This compares to these industry sectors’ share of gross value added of around 82per cent for the services sector, 7per cent for the manufacturing sector, and 11per cent for the mining and agricultural sector (where services includes construction, utilities and ownership of dwellings).

Figure 24: EMDG recipients by industry, 2013-14 grant year

Primary Food and

beverage manufacturing

Machinery and equipment manufacturing

Other

manufacturing Tourism and related industries

ICT services Professional, scientific and technical services

Education and culture Other services

Recipients (%)

Primary Manufacturing Services

5.0%

6.4%

8.0%

16.2%

10.6%

11.3% 11.8%

14.0%

16.8%

The principal market targeted by EMDG recipients continued to be the United States, with 56.6percent of all recipients paid grants for promotion activities to this market. Other high-ranking markets were the United Kingdom, mainland China, Singapore, Germany and Hong Kong (Figure25). The major mover over the past 10 years has been China. The advertising expenditure category was the largest expenditure category as a proportion of total assessed expenditure, followed by marketing visits and overseas representation costs (Figure 26).

Figure 25: Top six markets targeted by EMDG recipients, 2013-14 grant year

56.6%

32.4%

30.2%

21.2%

15.9% 15.8%

200

400

600

800

1,000

1,200

1,400

1,600

1,800

United States United Kingdom China Singapore Germany Hong Kong

Number of recipients

Note: Recipients may promote to more than one country.

122 Australian Trade Commission Annual Report 2014-15

Figure 26: EMDG recipients by expenditure category, 2013-14 grant year

28%

27%

22%

11%

3% 3%

0.3% 0.1%

100

Advertising

Marketing visits

Overseas representatives

Promotional events

Marketing consultants

IP registration

Product samples

Overseas buyers

Communications

Assessed expenditure ($ million)

EMDG scheme funding

The EMDG scheme’s appropriation for 2014-15 w as $137.9million, and a further $9.0million was

carried over from previous appropriations for grants from previous years.

For the 2013-14 grant year, 2,122businesses (72per cent of all recipients) received their full grant entitlements up to the initial payment ceiling of $60,000, and 821businesses received more than the initial payment ceiling, of which their second-tranche payment above that ceiling was paid at 65.28cents in the dollar. Eligible demand for grants was higher than available funds, resulting in the need to apply this payout factor to second-tranche payments for grants above $60,000.

Total cash funding used by the scheme in 2014-15 was $146.9million, including $9.0million carried over from 2013-14 for grants from that year. Of the funds appropriated in 2014-15, $6.1million, or 4.4per cent of the appropriation, was spent on administration.

Consultant Quality Incentive Programme

The Export Market Development Grants (Extended Lodgement and Consultant Quality Incentive) Determination 2012 provides the framework for a voluntary system aimed at improving the quality of applications prepared by EMDG consultants.

For 2014-15, EMDG consultants who had a demonstrated record of lodging at least five applications over the whole preceding lodgement period (2013-14), with a total grant adjustment rate of no more than 9per cent, and had applied to participate in the programme, were granted an extended period of an additional three months for lodging applications for EMDG grants under this determination.

In 2014-15, 47 eligible EMDG consultants were approved as participants in the programme and were listed on the Austrade website.

Part 02 / Report on performance. Outcome 1 - Programme 1.2 123

EMDG scheme helps SAGE Automation access global supply chains

SAGE Automation is Australia’s leading independent system integration company, specialising in industrial automation and control systems. As a trusted adviser to its clients, it designs, constructs, supports and improves industrial control and automation solutions, and provides advanced training to enhance the skills of those who work with this technology every day.

SAGE works with customers in the defence, infrastructure, manufacturing, mining and utilities sectors to deliver certainty in their control and automation challenges. Its customers include Glencore, BHPBilliton, Orica and Santos.

Founded by Andrew Downs in 1994, from rather humble beginnings, by 2008, SAGE had developed into a $40million business. Its export efforts were supported by four export market development grants during the 2000s until 2009, after which it outgrew EMDG eligibility, having reached a turnover of more than $50million, much

of which is now generated through the supply of its services and products to global supply chains.

Adrian Fahey, Chief Executive of SAGE, is full of praise for the role that the EMDG scheme played in enabling the company to break into computerised global supply chains. ‘The ability for SAGE to access funding to assist us in building our export market has really enabled our company to take our expertise to a world market. The benefits of exporting are twofold—not only does it provide the opportunity to expand your own business, but it also gives you great insight into what is driving business outside of your domestic market, pushing you to innovate and stay ahead of the market. Without a doubt, the success we have achieved in our business outside of Australia has been greatly assisted by our access to the EMDG scheme’, said Adrian.

Adrian strongly encourages other Australian companies to break into computerised global supply chains, and highlighted the opportunities in an article published on 19April 2015 in the Australian Financial Review, titled ‘Australian firms must catch up with high-tech global supply chains’.

Pictured: SAGE’s industrial automation and control systems at work. Photo: SAGE Automation.

124 Australian Trade Commission Annual Report 2014-15

Communication and promotional activity

During 2014-15, Austrade’s EMDG communication activities focused on alerting EMDG clients, including grant applicants, consultants and industry bodies, to the legislated provisions, guidelines and procedures attached to the EMDG Act. Publicity was also given to the option of grant applicants using EMDG consultants approved under the EMDG Consultant Quality Incentive Programme, which provided for an extended grant lodgement period of three months to 3March 2015.

EMDG success stories, featured in EMDG newsletters and on EMDG webpages, highlighted the export successes of applicants and the role the scheme plays in helping Australian businesses become sustainable exporters.

Austrade also undertook mail-outs to inform EMDG clients about new developments, and conducted workshops to improve applicants’ understanding of the scheme.

Fortieth anniversary of the EMDG scheme

This year marked 40years of the EMDG scheme. Established on 1July 1974, the scheme has since assisted tens of thousands of exporters, mostly small and medium-sized enterprises, to become sustainable exporters to a wide range of overseas markets.

Administrative performance, risk and fraud control

Austrade processed 3,087 (96.6per cent) of 2013-14 grant year applications within the 2014-15 year.

While striving for faster turnaround and better client service, Austrade maintained its strong focus on risk management and fraud control, which included the following measures:

âº All applications were subject to appropriate levels of assessment scrutiny, on a risk-managed basis.

âº Claimed grant amounts processed in 2014-15 were adjusted down by a total of $18.7million (10.9per cent) as a result of Austrade’s assessment activities during the year.

âº One person was convicted of fraud against the EMDG scheme during the year. At 30June 2015, there were no persons before the court for alleged fraud, and no cases were with the Commonwealth Director of Public Prosecutions for consideration as to whether to commence court proceedings.

During 2014-15, 57 of the applications processed resulted in a request for an internal Austrade review of the initial grant assessment, down from 69 in the previous year. This appeal rate was 1.7per cent of applications processed.

Details of appeals made by EMDG applicants to the Administrative Appeals Tribunal (AAT) are shown in Table11. Three appeals by EMDG applicants were finalised during 2014-15, with all three decided by the AAT in Austrade’s favour. Two AAT appeals were in progress at 30June2015.

Part 02 / Report on performance. Outcome 1 - Programme 1.2 125

Table 11: Appeals to the Administrative Appeals Tribunal under the EMDG Act in 2014-15

Number of appeals in progress at 1 July 2014 3

Number of appeals received from 1 July 2014 to 30 June 2015 2

Total 5

Appeals withdrawn, finalised or settled prior to hearing 0

Decisions handed down by the AAT 3

Decisions handed down by the Federal Court 0

Total 3

Number of appeals in progress at 30 June 2015 2

No applicants were denied a grant in 2014-15 under the ‘not fit and proper’ provisions in section87AA of the EMDG Act, and 12cases were completed with no ‘not fit and proper’ findings . No appeals against ‘not fit and proper’ determinations were lodged, and no applicants had section73 of the EMDG Act applied for failing to respond to Austrade’s request for information. At 30June2015, 11companies were under review under section87AA.

No EMDG consultants were found to be ineligible to lodge EMDG grant applications on behalf of their clients under the ‘not fit and proper’ provisions for EMDG consultants in section79A of the EMDG Act. One case was completed, which did not result in a ‘not fit and proper’ finding .

PMD International attributes its success to EMDG scheme

PMD International Pty Ltd manufactures and supplies chainsaw, lawnmower and brush-cutter parts and accessories from China to more than 50 countries. Paul Duggan, Director of PMD, said, ‘We are an Australian company making and selling our products from China to our world distribution network, which is now very well cemented. EMDG support and funding made this all possible. We could not have done it without EMDG assistance.’

PMD has accessed global supply chains to supply its wide range of mechanical parts and accessories to global producers and distributors. It consolidates all orders into a single shipment, eliminating the issues, cost and risk involved in dealing with multiple suppliers.

PMD has been the recipient of seven export market development grants during the past seven years, amounting to more than $380,000. Over that time, PMD’s annual turnover from international sales has grown to more than $7 million, and continues to expand.

Pictured: Qualified chainsaw operators put PMD’s Archer Chain through its monthly quality tests on Australian hardwood and softwood. Photo: PMD International.

126 Australian Trade Commission Annual Report 2014-15

Asian Business Engagement Plan The Asian Business Engagement Plan, a merit-based, competitive grant programme administered by Austrade, was closed on 30June 2015. No further grant rounds will be made available.

A grant round was conducted in 2014-15, with 18grants awarded to Australian member-based business organisations, encompassing 12national bodies, three state and territory organisations, one regional organisation and two Australian offshore organisations. A diverse range of sectors were represented, including food and agribusiness, infrastructure, composites, automotive, textiles, education and training, services, medical devices, and sports medicine.

Since funding for the Asian Business Engagement Plan commenced on 1July 2013, Austrade has awarded a total of 45grants (including 16multi-year grants) to Australian member-based business organisations. Total grant expenditure under the programme is expected to be $3.7million, based on existing funding commitments.

Funding commitments for multi-year projects contracted under Asian Business Engagement Plan grant rounds will continue to be supported by Austrade, with nine projects concluding by 30June 2016 and three projects concluding by 30June 2017.

Information on grants awarded by Austrade under this programme is available at www.austrade.gov.au.

Milena Bliss Senior Trade Adviser, Sydney

In the 11years that Milena Bliss has worked at Austrade, she has held a variety of roles, including Business Development Manager in Auckland, and Investment Adviser

and now Senior Trade Adviser in Austrade’s international health team, based in Sydney.

Milena’s work focuses on the health, bi otechnology and ICT sectors, and her

previous career experience has been an asset to understanding the challenges faced by exporters, as she encountered many of the same issues herself when she

worked as a procurement specialist for the Au ckland District Health Board, as an IT

portfolio contract manager with AMP, and as a contract negotiator for a global outsourcing systems integrator.

Originally from Bulgaria, where she completed a degree in international economic relations, Milena arrived in Australia in 1995. ‘I grew up in Eastern Europe so my insights into the cultures of the region—and speaking Bulgarian and Russian—have proven very useful in assisting Australian exporters to access opportunities there. It’s a region that is developing rapidly and has much untapped potential’, she said.

Part 02 / Report on performance. Outcome 2 - Programme 2.1 127

Outcome 2

The protection and welfare of Australians abroad through timely and responsive consular and passport services in specific locations overseas.

Programme 2.1: Consular and passport services

Objective To support and assist Australians travelling and working overseas through the delivery of effective consular services, efficient passport services, access to travel advice and preparations for high-risk scenarios through practical contingency planning in locations overseas where Austrade has consular management responsibilities.

Deliverables and key performance indicators Tables 12 and 13 summarise the results for programme2.1 against the deliverables and key performance indicators set out in Austrade’s 2014-15 Portfolio Budget Statements.

Programme 2.1 highlights

âº Austrade received 13,486 passport applications and 98percent were processed without error.

âº 99.5percent of routine passport applications were processed and travel documents delivered to clients within three working weeks.

âº 1,053 emergency travel documents were issued overseas within two working days of application.

âº 891 Australians overseas were provided with high-quality and responsive consular support.

âº 12,558 notarial acts were performed throughout the year.

128 Australian Trade Commission Annual Report 2014-15

Table 12: Summary of results for programme 2.1 deliverables

Deliverables

Comprehensive, responsive, high-quality consular services are delivered to an increasing number of Australian travellers and citizens living overseas, including notarial services and assistance with welfare issues, whereabouts enquiries, arrest or detention matters, death and medical emergencies.

Austrade provided high-quality and responsive consular support to PAGE

891Australians overseas, including assistance to 180people arrested or 131

imprisoned overseas, 120people requiring medical assistance or hospitalisation, and support to the families of 83people who died overseas.

High-quality passport services are provided to Australians, including processing new passport applications, registering lost or stolen passports, issuing emergency passports, and detecting passport fraud.

Austrade received 13,486 passport applications and 98percent were processed PAGE

without error.

131

Consular contingency planning is reviewed and updated annually and effective contingency planning is undertaken for major events or high-risk scenarios, including through regular reviews of procedures and available resources, training of staff and coordination with other government agencies and foreign governments.

During the year, Austrade facilitated 11test exercises of consular contingency PAGE

plans and developed specific plans for events overseas. Austrade consular staff 130

continued to receive contingency planning and crisis response training.

New passport applications received.

Austrade received 13,486 new passport applications in 2014-15 (up by PAGE

16.5percent on the previous year).

131

Number of notarial acts.

Austrade performed 12,558 notarial acts in 2014-15 (down by 12percent on the PAGE

previous year).

131

Part 02 / Report on performance. Outcome 2 - Programme 2.1 129

Table 13: Summary of results for programme 2.1 key performance indicators

Key performance indicators

In accordance with the Department of Foreign Affairs and Trade Passport Client Services Charter:

Urgent passport issues are dealt with in a timely and responsive manner. Where a priority processing fee is paid, the passport is to be provided within two working days.

Austrade provided responsive passport services to Australians with urgent travel PAGE

needs, issuing 1,053emergency travel documents overseas within two working 131

days of application.

(a)

Routine passports are issued within three weeks.

99.5percent of routine passport applications were processed and travel documents delivered to clients within three working weeks.

In accordance with the Department of Foreign Affairs and Trade—Austrade memorandum of understanding on the delivery of consular and passports services:(b)

Notarial services are to be delivered within three working days of the lodgement of documents from a client.

During 2014-15, Austrade did not have a specific system in place to measure the length of time taken to carry out notarial services. However, as notarial services are generally carried out at the time documents are presented or at an arranged appointment time, the majority of notarial services were delivered within three working days of the lodgement of documents, and Austrade has received no complaints from clients on notarial services provided. A new consular information system will be in place in Austrade posts from July 2015, providing more accurate reporting of this measure.

(c)

Normal passport applications are scanned within 24 hours.

98.2percent of the 13,486 passport applications received at Austrade posts were scanned within 24 hours.

(a) In Austrade’s 2014-15 Portfolio Budget Statements, this key performance indicator (KPI) included an issuing timeframe of 10working days. While historically Austrade has met this KPI, this timeframe has been amended to three weeks to align with the DFAT Passport Client Services Charter, which was changed during the year.

(b) In Austrade’s 2014-15 Portfolio Budget Statements, this subheading referred to the Department of Foreign Affairs [and Trade] Consular Services Charter. This should have referred to the Department of Foreign Affairs and Trade—Austrade memorandum of understanding on the delivery of consular and passport services and has been changed accordingly.

(c) In Austrade’s 2014-15 Portfolio Budget Statements, this KPI included a reference to a 3per cent tolerance, which historically Austrade has met. This tolerance reference has been removed to align with the DFAT Passport Client Services Charter, which was changed during the year. The KPI has also been moved from under the DFAT Passport Client Services Charter subheading to sit under the Department of Foreign Affairs and Trade—Austrade memorandum of understanding on the delivery of consular and passport services.

130 Australian Trade Commission Annual Report 2014-15

Austrade-managed consulates Austrade provided support throughout the year to Australian citizens and permanent residents travelling and working overseas by delivering prompt, effective and courteous consular assistance and accurate and timely passport services. Austrade also provided access to current travel advice, practical contingency planning and rapid crisis response in locations overseas where it has consular management responsibilities.

At 30 June 2015, Austrade operated consulates for the Australian Government in 17overseas locations, representing 10per cent of the total number of Australian diplomatic and consular points of service (Table14). The number of Austrade-managed consulates increased from the previous year with the opening of the Consulate-General in Houston, United States, in May 2015.

Table 14: Austrade-managed consulates at 30 June 2015

Auckland

Bogota

Dubai

Prague(a)

San Francisco

Sao Paulo

Frankfurt

Fukuoka

Sapporo

Toronto

Houston Ulaanbaatar

Istanbul Vancouver(a)

Milan Vladivostok(a)

Osaka

(a) Consulates managed by an Honorary Consul.

Austrade-managed consulates provide a range of services to Australian travellers and Australian citizens living overseas, including notarial services; assistance with welfare issues, missing persons, whereabouts enquires, arrest or detention matters and medical emergencies; support for victims of serious crime; processing new passport applications and replacing lost or stolen passports; and detecting attempted document or identity fraud.

Contingency planning and cr isis-related assistance

Austrade-managed consulates continued to build collaborative working relationships with other government and non-government agencies to facilitate effective crisis-related assistance. Consulates refined their contingency planning for major events and improved their preparedness for potential high-risk scenarios that may affect the safety and welfare of Australians overseas.

During the year, Austrade facilitated 11test exercises of consular contingency plans and developed event-specific plans for events such as the FIFAWorld Cup, with matches held in Sao Paulo in June and July 2014, and the National Rugby League Nines event held in Auckland in February 2015. Eight Austrade staff received contingency planning and crisis response training through Department of Foreign Affairs and Trade-run courses, with a further 17staff receiving consular training, which included elements of contingency planning.

Austrade worked closely with Australian embassies and high commissions and the Department of Foreign Affairs and Trade consular operations and passport operations branches in Canberra throughout the year, especially when dealing with complex cases.

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Contingency planning in response to Sao Paulo water crisis

Austrade-managed consulates continuously assess emerging high-risk scenarios and take steps to ensure that the welfare of Australians is protected. In response to an unprecedented water crisis in Sao Paulo, which is experiencing dire water shortages leading to increased health risks and heightened protest activities, Austrade’s Consulate-General in Sao Paulo has reviewed its consular options, in close

cooperation with local government agencies, other foreign government representatives and the Australian Embassy in Brasilia.

A phased action plan has been developed encompassing employee work health and safety issues, the delivery of services to clients, and a strategy for providing accurate and timely advice to Australian travellers and residents. Austrade has also established an onshore working group to support the Consulate-General’s planning activities and work through possible scenarios that might unfold during this ‘slow burn’ crisis, and to coordinate Austrade’s responses with the Department of Foreign Affairs and Trade.

Pictured: Staff from Austrade’s Consulate-General in Sao Paulo discuss the water crisis in that city, and Austrade’s response to the crisis as part of its contingency planning activities. L-R: Paula Frodl, Daniel Meninelli and Sheila Lunter. Photo: Austrade.

Consular and passport services

In 2014-15, Austrade provided high-quality and responsive consular support to 891Australians in difficulty overseas. This included assistance to 180people arrested or imprisoned overseas, 120people requiring medical assistance or hospitalisation, and support to the families of 83people who died overseas. The number of notarial acts performed decreased by 12per cent from 14,342 in 2013-14 to 12,558 in 2014-15.

The number of passport applications received increased by 16.5per cent, from 11,571 in 2013-14 to 13,486 in 2014-15. Austrade provided responsive passport services to Australians with

urgent travel needs, issuing 1,053emergency travel documents overseas within two working days of application.

Accuracy rates for processing passport applications were high, with 98per cent processed without error.

Table 15 provides details of consular support provided by Austrade in the past five years, including the number of notarial acts performed and number of passport applications received.

132 Australian Trade Commission Annual Report 2014-15

Table 15: Consular assistance provided by Austrade, 2010-11 to 2014-15

2010-11 2011-12 2012-13 2013-14 2014-15

No. of Australians who received consular support from Austrade(a) 129,592 90,763 90,874 808(a) 891

No. of notarial acts performed by Austrade 10,146 11,139 11,639 14,342 12,558

No. of passport applications received by Austrade 12,990 12,081 11,258 11,571 13,486

(a) In 2013-14, Austrade realigned its reporting of consular assistance to show the number of instances where significant assistance was provided to Australian citizens, rather than displaying the number of general enquiries. Significant assistance includes assistance provided to citizens arrested or imprisoned overseas or who require medical assistance or hospitalisation, and support provided to families of citizens who die overseas. This methodology is consistent with the approach taken by the Department of Foreign Affairs and Trade, and accounts for the significant change in figures between the 2012-13 and 2013-14 reporting years.

CaroleKelly formerConsularOfficer,Vancouver

Carole Kelly, former Consular Officer from Austrade’s Vancouver office, retired this year after 34years of dedicated service to Austrade. She started working for Austrade in 1981, in the then Trade Commission in Vancouver, as Secretary to the Trade Commissioner. After also serving as Secretary to the Consul-General, she took up the role of Passports Officer in 1988.

Carole said that the consular role was varied, challenging and rewarding. ‘On any given day, I may be asked to assist a visitor who had been hospitalised or arrested, help an

Australian replace a lost passport so that they can travel urgently, set up appointments for visiting Australian officials, or talk to host government and local authorities about coordinating an emergency response to a crisis’, noted Carole. ‘It has been a privilege to have been the “face of Australia” and to be able to help Australians in need’, she added.

Carole recalls with fondness meeting the Australian Prime Minister at the Commonwealth Heads of Government Meeting in Canada in 1987; welcoming the Australian Governor-General to Canada in 2013; and this year, meeting the Hon Andrew RobbAOMP, Minister for Trade and Investment, when he was in Vancouver to attend the Vancouver International Wine Festival, which was held from 20February to 1March 2015, and featured Australia as a host nation.

Pictured: Carole Kelly with Austrade’s CEO, Bruce Gosper, at the International Wine Festival in Vancouver, February 2015. Photo: Austrade.

MANAGEMENT AND ACCOUNTABILITY

T R PA 03

Corporate governance 134

Corporate planning 139

Risk management 141

Legislative framework and external scrutiny 143

Management of human resources 145

Financial management and business assurance 161

Managing knowledge and information 165

134 Australian Trade Commission Annual Report 2014-15

Management and accountability

Austrade was established by the Australian Trade Commission Act 1985. It is a non-corporate Commonwealth entity under the Public Governance, Performance and Accountability Act 2013, and a statutory agency under the Public Service Act 1999. Austrade has an executive management governance structure headed by its Chief Executive Officer (CEO), and is part of the Foreign Affairs and Trade portfolio.

Corporate governance Austrade’s corporate governance framework supports the achievement of the agency’s stated objectives, deliverables and key performance indicators in an ethical, efficient and effective manner, meeting legislative, policy and accountability requirements. The framework provides a mature system for managing risk (internal controls), human and financial resources, and planning and assurance processes.

Austrade’s corporate governance framework is consistent with the Australian National Audit Office (ANAO) better practice guide titled Public sector governance: Strengthening performance through good governance, published in June 2014.

Corporate Governance Forum

In 2014-15, Austrade continued its membership of the Corporate Governance Forum, an initiative it developed in 2009. The forum assists Australian Government agencies to achieve best practice in governance through the exchange of knowledge and ideas.

Agencies hosted four forum meetings during the year covering the following topics:

âº Digital transition—where to from here?

âº Introduction and implementation of the Commonwealth risk management policy— joining the dots

âº Governance of the future—have we got it right? Can we do it better? What do we need to do differently in the future?

âº Red tape reduction and managing risk.

Austrade has benefited from maintaining an active role in the forum’s organising committee, and its continued participation helps enhance its risk culture, refine its audit practices and improve its corporate policy framework.

Chief Executive Officer

Austrade’s CEO is responsible to the Minister for Trade and Investment for Austrade’s performance. The functions and duties of the CEO are established through the Australian Trade Commission Act 1985. The Minister may give the CEO directions with respect to the performance of his functions and exercise of powers. No ministerial directions were issued in 2014-15.

The CEO is assisted in his role by an Executive Group, an Audit and Risk Committee, an Ethics Committee and two management subcommittees (see Figure 27 on page 139). Both the Audit and Risk Committee and the Ethics Committee have independent chairpersons, and the Audit and Risk Committee has an additional independent member.

Part 03 / Management and accountability. Corporate governance 135

Austrade’s Executive, pictured with Austrade staff members Stephanie Julienne (third from left) and Deborah Lewis (second from right), who participated in Executive meetings throughout the year. L-R: Laurie Smith, Tim Beresford, Stephanie Julienne, Marcia Kimball, Bruce Gosper, Lynne Ashpole, Deborah Lewis, and Grame Barty. Photo: Austrade.

Austrade’s Executive

Austrade’s Executive advises the CEO on key ma nagement issues, strategic priorities, and

corporate, operational and divisional plans, as well as corporate policy and operational issues. It met 25times in 2014-15. The members of the Executive are listed below.

Bruce Gosper—Chief Executive Officer Responsible for the management of Austrade and reports directly to the Minister for Trade and Investment.

Bruce has been Austrade’s CEO since 1February 2013. From 2009 until his appointment to Austrade, Bruce was a Deputy Secretary in the Department of Foreign Affairs and Trade, where he was the Australian Government’s senior trade policy official, responsible for all trade negotiations. Bruce has worked extensively on the Government’s trade and commercial relationships, both in Australia and overseas, during his more than 30years of government service.

Grame Barty—Acting Executive Director, International Operations Group43 Responsible for Austrade’s offshore network, international issues branch, trade, and marketing, online and business practice.

Grame has more than 30years of international business and government experience in areas such as innovation commercialisation, marketing, and trade and investment. As a senior executive in Austrade, Grame has influenced and implemented government policy in international trade, developed and marketed new products, negotiated international multiparty agreements, and secured numerous foreign direct investment and collaborative research opportunities, particularly in the information technology, biofuels, and water sustainability and management sectors. He was Austrade’s Regional Director, Americas from 2008 to 2011, and recently General Manager, Growth and Emerging Markets.

43 Laurie Smith was in the position of Executive Director, International Operations Group until 20March 2015. Grame Barty commenced acting in this role on 23March 2015.

136 Australian Trade Commission Annual Report 2014-15

Tim Beresford—Executive Director, Tourism, Investment, Education and Programmes Group Responsible for tourism, investment, international education, government and ministerial, and the Export Market Development Grants scheme.

Tim has been an Executive Director with Austrade since October 2011. Prior to joining Austrade, he worked as a First Assistant Secretary at the Department of the Prime Minister and Cabinet, where he co-led the negotiation and delivery of the National Health Reform Agreement with all states and territories. Before joining the Australian Public Service, Tim worked for 17years in the private sector with a number of senior roles in Westpac Banking Corporation, as well as 10years in the management consulting sector, including six years at McKinsey & Company.

From 2003 to 2012, Tim was on the board of Plan Australia International. In February 2013, he joined the board of the Benevolent Society and is currently Chair, Research, Policy and Advocacy Committee.

Marcia Kimball—Chief Operating Officer 44 Responsible for national and international human resource management; finance; information technology services; legal, procurement and fraud; and security, consular and property.

For 14 years, Marcia managed Austrade’s team of human resource professionals across its international network, encompassing attraction and retention, strategy and policy, systems and reporting, capability and talent. In July 2014, Marcia was appointed Chief Operating Officer.

Before joining Austrade, Marcia was the Executive Director, Corporate Development for the Civil Aviation Safety Authority, and also worked in management roles for more than a decade within the broader Airservices Australia. She began her career in education and professional development, leaving the teaching service at a senior level in the late 1980s.

Lynne Ashpole—Head of Strategy, Policy Coordination, Governance and Media Responsible for corporate governance; internal audit; policy coordination; corporate planning and strategy; and Austrade’s media unit.

Before joining Austrade, Lynne was a senior adviser to a minister in the Australian Government, having previously worked in similar positions in New South Wales and the Northern Territory. Those positions gave her the opportunity to work in a wide variety of economic and social policy portfolios. Prior to those appointments, she worked in legal and policy positions in the Commonwealth Attorney-General’s Department, the NSW Ministry for Police, and the NSW Cabinet Office, including as the inaugural Director of the NSW Better Regulation Office. She started her career working in private sector law firms.

44 The role of Chief Operating Officer was created in July 2014 to include oversight of human resources, consular and business services, finance, information technology services, and legal, security and procurement. Peter Yuile previously held the position of Executive Director, Tourism, Education and Corporate Operations Group, with responsibility for many of these functions. He took leave from the position in June 2014, and retired from Austrade in in October 2014. Responsibility for the functions of tourism and international education were transferred to the Executive Director, Tourism, Investment, Education and Programmes.

Part 03 / Management and accountability. Corporate governance 137

Increasing opportunities for women to participate in high-level decision-making

Throughout the year, the CEO invited two high-potential, Australia-based female staff members to attend Executive meetings to increase the opportunity for women to observe and advise on high-level decision-making within Austrade (one Senior Executive Service employee and one non-Senior Executive Service employee, to be rotated every 12months).

Participating staff members for 2014-15 were Deborah Lewis, General Manager, Tourism; Cheryl Stanilewicz, Senior Trade Commissioner, WashingtonDC (to December 2014); and Stephanie Julienne, Acting Manager, Tourism Infrastructure (from January 2015).

Audit and Risk Committee

The Audit and Risk Committee’s role is to provide independent assurance and advice to the CEO on Austrade’s risk, control, compliance and external accountability responsibilities. The committee’s processes are consistent with the ANAO better practice guide titled Public sector audit committees: Independent assurance and advice for accountable authorities, published in March 2015.

At 30 June 2015, the committee consisted of two independent members and one internal Austrade member. The independent members for 2014-15 were David Lawler (chair) and Jennifer Clark. The internal Austrade member was the Assistant General Manager, Marketing and Communications.

At various times throughout the year, other Austrade staff were also internal Austrade members of the committee. The Executive Director, Tourism, Investment, Education and Programmes Group and the General Manager, Established Markets finished their terms on 31August 2014, and the Executive Director, International Operations Group, retired from his position as an internal member of the committee in March 2015, upon leaving Austrade. The committee met five times during the year.

Ethics Committee

The Ethics Committee promotes high standards of ethical behaviour throughout Austrade, provides clear and consistent guidance on standards of conduct, and evaluates the effectiveness of Austrade’s policies and practices in relation to ethical behaviour.

The committee consists of an independent chair, Jeff Lamond; Austrade’s Chief Operating Officer and Chief Human Resources Officer; and a cross-section of Austrade’s senior management from its onshore and offshore offices. The Chief Counsel, Legal, Procurement and Fraud is designated as Chief Ethics Officer and is an exofficio member of the Ethics Committee. The committee met three times in 2014-15.

138 Australian Trade Commission Annual Report 2014-15

Management subcommittees

Members of Austrade’s Executive chair subcommittees on workplace relations and security. Those subcommittees support governance, inform operations, and provide mechanisms for consultation and communication with staff.

Austrade’s committees and subcommittees in 2014-15, and their roles, activities and participants, are listed in Table16. Austrade’s executive management structure and reporting relationships are shown in Figure27.

Table 16: Austrade’s committees and subcommittees in 2014-15

Committee Role and activities Participants at 30 June 2015

Executive Considers key management issues, CEO (chair); executive directors; Chief (met 25 times in strategic priorities, and corporate, Operating Officer; and Head of Strategy, 2014-15) operational and divisional plans, Policy Coordination, Governance and Media as well as corporate policy and

operational issues, and provides advice to the CEO

Audit and Risk Considers governance Independent members: David Lawler Committee arrangements and provides (chair) and Jennifer Clark. Internal member: (met five times in independent advice and Assistant General Manager, Marketing and 2014-15) assurance to the CEO on risk Communications

management, compliance and external accountability

Ethics Committee Promotes high standards of ethical Independent member: Jeff Lamond (chair). (met three times in behaviour throughout Austrade Internal members: Chief Operating Officer; 2014-15) Chief Human Resources Officer; Chief

Counsel, Legal, Procurement and Fraud; and a cross-section of senior managers from onshore and offshore

Subcommittee

Security Advisory Provides advice on the Chief Operating Officer (chair); Assistant Group management of security issues, General Manager, Security, Consular and including policy, planning and Property (Austrade Security Executive); Chief risk management. Also considers Human Resources Officer; General Manager,

specific security issues in business Growth and Emerging Markets; Chief units and overseas offices Information Officer; Chief Counsel, Legal, Procurement and Fraud; Agency Security Adviser; and Information Technology Security

Adviser

Workplace Provides advice and consults Chief Operating Officer (chair), managers Relations with staff and management on and Austrade performance level 1-5 staff Committee workplace relations and change representatives management issues

Part 03 / Management and accountability. Corporate planning 139

Figure 27: Austrade’s executive management structure

Parliament

Minister

CEO

Audit and Risk Committee

Ethics Committee

Executive Group

Security Advisory Group Workplace Relations Committee

Corporate planning Under the Australian Trade Commission Act 1985, Austrade’s CEO is required to present a corporate plan each year to the Minister for Trade and Investment.45

The corporate plan sets out the key strategies Austrade will pursue to achieve the outcomes and priorities set by the Australian Government in the Portfolio Budget Statements for the relevant year. Austrade’s planning and performance management practices align its activities and resources to deliver those priorities.

Corporate planning is conducted within the framework of Austrade’s strategic operating environment, and seeks to ensure that Austrade provides maximum value to the Government and Australian businesses and institutions, while ensuring the highest ethical standards.

Figure28 outlines the relationship between Austrade’s key planning processes.

45 From 1 July 2015, Austrade’s corporate planning and reporting will also comply with requirements under the Public Governance, Performance and Accountability Act 2013.

140 Australian Trade Commission Annual Report 2014-15

Figure 28: The relationship between Austrade’s key planning processes in 2014-15

AUSTRALIAN TRADE COMMISSION

CORPORATE PLAN

Australian Trade Commission Annual Report 2014-15

AUSTRALIAN TRADE COMMISSION

2014-15

Portfolio Budget Statements: provides information on the proposed resources allocated to Austrade in the reporting year to achieve the outcomes and priorities set by the Government.

Corporate plan: explains the key strategies that Austrade will pursue in order to achieve the outcomes and priorities set by the Government.

Performance management framework: links the key performance indicators in Austrade’s Portfolio Budget Statements with more detailed internal reporting measures.

Annual report: provides information about Austrade’s performance in relation to outcomes and budget measures, as part of Austrade’s accountability to the Minister and the Parliament of Australia.

Performance management framework

To monitor overall organisational performance, Austrade’s performance management framework links the key performance indicators in Austrade’s Portfolio Budget Statements with more detailed internal reporting measures.

The framework ensures Austrade’s activities are aligned to achieving defined operational objectives, while incorporating measures to monitor stakeholder satisfaction, internal governance, and resources and capability.

Staff performance agreements

Staff performance agreements are made on an annual basis, covering the period from 1July to 30June each year. The agreements are consistent with the market and business plans of the unit in which the individual staff member works, as well as with Austrade’s performance management framework. For more information on staff performance agreements, see page156.

Employee communications

Austrade’s governance arrangements are designed to ensure effective decision-making and communication of corporate governance and organisational priorities. During 2014-15, staff received information on a wide range of corporate issues, including new priorities, international business missions, major system changes, corporate policies, work health and safety, security issues, enterprise agreement negotiations, executive meeting outcomes, organisational restructures, and the components of the 2014-15 Budget that were relevant to Austrade.

The methods used to communicate corporate information to staff included:

âº CEO and corporate messages delivered via email

âº tailored messages from executive directors, general managers, line managers and various team meetings

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âº a weekly online newsletter, Global News âº presentations onshore from Austrade staff through the ‘Stay in Touch’ programme

âº Austrade’s global intranet, ‘The Hub’, which provides a single location for collaboration and information-sharing.

Corporate training programmes, including pre-posting training, induction training and online modules, were also used throughout 2014-15 to keep staff informed and aware of current corporate policies and procedures.

Each year, all Austrade staff complete a mandatory Austrade corporate policy refresher online module. Key policy focus areas covered in the module in 2014-15 included work health and safety, anti-bribery, fraud prevention, corporate governance, procurement, security, finance and ethical business behaviour.

Risk management The CEO meets the risk management requirements of section16 of the Public Governance, Performance and Accountability Act 2013 by having Austrade managers develop mitigation strategies and actions for identified agency risks in the agency risk management plan, and reporting progress against these to the Audit and Risk Committee and the Executive on a quarterly basis. This assists in providing assurance to the CEO that risks are being managed and monitored.

Throughout 2014-15, Austrade continued to manage its exposure to risk and mitigate adverse consequences through the implementation of risk management principles and practices, as outlined in the Chief Executive’s Instruction on risk management and the corporate governance framework.

Risks identified in the 2014-15 agency risk management plan covered strategic risks, including geopolitical risk; capitalising on market intelligence; transitional processes, such as the Significant Investor and Premium Investor Visa programmes; and operational and corporate risks, including security, consular, business continuity, and ethics and integrity.

Austrade’s 2014-15 agency risk management plan was prepared in accordance with the risk management standard ISO31000:2009. The plan identifies key risks with the potential to affect Austrade’s ability to achieve the objectives and priorities set out in its corporate plan.

Internal controls

The Audit and Risk Committee and the internal auditor have noted the mature nature of Austrade’s internal control framework. The main features of the internal control framework include:

âº policies and procedures, including Chief Executive’s Instructions, which support compliance with legislative and administrative requirements

âº a positive compliance and management environment supported by an effective schedule of delegations

âº an effective internal audit function that seeks to appropriately balance performance and compliance audits

âº an effective risk management framework, including fraud control, risk management plans, security and business continuity management and disaster recovery

âº compliance with the Australian Public Service Values and Code of Conduct and the Public Governance, Performance and Accountability Act 2013

142 Australian Trade Commission Annual Report 2014-15

âº monitoring controls through effective planning at the corporate, operational and business unit levels, reviews of business units and ongoing budget management

âº accountability mechanisms, including reports, reviews and individual performance management arrangements.

Fraud control

Austrade maintains fraud prevention, detection, investigation and reporting procedures and processes that are compliant with section10 of the Public Governance, Performance and Accountability Rule 2014.

A fraud control plan, effective from 2013 to 2015, has been endorsed by the Audit and Risk Committee and is consistent with the Australian standards applying at the time of endorsement (AS/NZSISO31000:2009 Risk Management and AS8001:2003 Fraud Corruption and Control). A principles-based ethics and integrity approach underpins the strategies of awareness, prevention, identification and reporting, with the aim of continuous improvement.

A 2014 ANAO cross-agency audit of fraud control and management arrangements identified that Austrade needed to enhance consistency with the ANAO better practice guide titled Fraud control in Australian Government entities, published in March 2011. Following the audit, Austrade has been working towards strengthening its compliance and alignment with better practice in fraud control and management by improving mechanisms in its fraud risk framework, including developing a centralised fraud management database and a comprehensive fraud investigation manual, and also developing further fraud risk awareness training for staff.

Anti-bribery

Austrade continues to take steps to ensure that its practices comply with the anti-bribery provisions in section70 of the Australian Criminal Code, as well as Australian and international law and Austrade policy. Initiatives include mandatory training for all staff on ethical standards and legal obligations. Staff receive this training on commencement with Austrade and before overseas postings, and in the annual policy refresher course.

Austrade has collaborated with other Australian Government agencies on the development of anti-bribery material for business and industry groups operating nationally and internationally. Austrade is also working with business groups, chambers of commerce and other organisations on anti-bribery outreach programmes and supports the work of international organisations like the Organisation for Economic Co-operation and Development (OECD) and Transparency International. Austrade continues to remind Australian businesses operating in international markets of their ethical and legal obligations under Australian law.

A delegation of Australian Government agencies, including Austrade, appeared before the OECD in December 2014. Austrade was responding to a recommendation in the OECD’s Working Party on Bribery PhaseIII report that it take ‘concrete steps’ to warn business clients of the risk of using local agents. Austrade also provided evidence of its awareness raising—on the operation of the law and means of mitigating the risk of bribery—among staff and through its outreach programme to business clients.

Following Austrade’s appearance, the OECD published its findings in April 2015. It found Austrade to have fully implemented the OECD

Part 03 / Management and accountability. Legislative framework and external scrutiny 143

recommendations regarding foreign agents. It also found an ongoing obligation to raise awareness of the operation of anti-bribery laws and actions that should be taken to mitigate that risk among Austrade’s business clients. Further recommendations were made by the OECD regarding publishing materials to distinguish the use of facilitation payments from bribes. This will continue to be done through Austrade’s outreach programme.

Internal audit

The activities of Austrade’s internal auditor are defined by a risk-based annual internal audit plan endorsed by the Audit and Risk Committee, and approved by the CEO. All significant Austrade activities are considered to be within the ambit of internal audit. The internal audit plan seeks to coordinate internal audit activity with other assurance activities and mechanisms, including external audits and ANAO better practice guides.

During the year, 19compliance and performance-based audits and reviews were undertaken by Austrade’s internal auditor, PricewaterhouseCoopers, which observed that Austrade has a strong system of internal controls and operates within a mature control framework, and noted that no serious control breakdown had been identified.

Legislative framework and external scrutiny This section outlines the legislative framework and external scrutiny mechanisms under which Austrade operates.

Legislation

Austrade operates under the following legislation:

âº Australian Trade Commission Act 1985— defines the functions, duties and powers of the CEO and the Commission

âº Export Market Development Grants Act 1997—provides for the Export Market Development Grants scheme, the Government’s principal export market assistance programme, which is administered by Austrade

âº Public Governance, Performance and Accountability Act 2013—provides the framework for the proper management of public money and property. During the year, Austrade implemented new processes to transition to the Act, which replaced the Financial Management and Accountability Act 1997 on 1 July 2014

âº Financial Management and Accountability Act 1997—provided the transitional provisions until 30June 2015

âº Public Service Act 1999—governs the establishment and operation of, and employment in, the Australian Public Service.

144 Australian Trade Commission Annual Report 2014-15

Independent audits

Austrade was the subject of two reports tabled by the Auditor-General in Parliament during 2014-15:

âº Fraud control arrangements (Audit Report no.3, 2014-15)

âº Administration of the Export Market Development Grants scheme (Audit Report no.15, 2014-15).

ANAO better practice guidelines encourage agencies to consider relevant ANAO reports tabled for other agencies, with the aim of improving public administration across Australian Government agencies. During the reporting period, Austrade considered nine ANAO reports tabled by the Auditor-General that were assessed as relevant to Austrade’s operations:

âº Cyber attacks: Securing agencies’ ICT systems (Audit Report no.50, 2013-14)

âº The management of physical security (Audit Report no.49, 2013-14)

âº Confidentiality in government contracts: Senate Order for department and agency contracts (calendar year 2012 compliance) (Audit Report no.4, 2013-14)

âº Establishment and use of multi-use lists (Audit Report no.54, 2013-14)

âº Indigenous employment in Australian Government entities (Audit Report no.33, 2013-14)

âº Confidentiality in government contracts: Senate Order for departmental and agency contracts (calendar year 2013 compliance) (Audit Report no.1, 2014-15)

âº Business continuity management (Audit Report no.6, 2014-15)

âº Implementation of audit recommendations (Audit Report no.8, 2014-15)

âº Delivery of Australia’s consular services (Audit Report no.21, 2014-15).

Austrade’s management also reviewed three better practice guides:

âº Public sector governance: Strengthening performance through good governance

âº Public sector audit committees: Independent assurance and advice for chief executives and boards

âº Public sector financial statements: High-quality reporting through good governance and processes.

Austrade also worked with the Audit and Risk Committee on ways to improve Austrade’s internal controls framework.

Judicial decisions, decisions by administrative tribunals and the Information Commissioner, and reviews by outside bodies

During the reporting period, there were no judicial decisions or reviews by outside bodies that had a significant impact on the operations of Austrade. Austrade’s input to parliamentary inquiries and briefings is discussed on page107.

Details of appeals to the Administrative Appeals Tribunal (AAT) under the Export Market Development Grants Act 1997 are shown on page125.

The Information Commissioner finalised one review of a freedom of information decision made by Austrade. This decision is currently on appeal at the AAT.

The Commonwealth Ombudsman has advised Austrade that it is investigating a complaint about the handling of disclosures made under the Public Interest Disclosure Act 2013. That investigation was ongoing during the reporting period.

Part 03 / Management and accountability. Management of human resources 145

Privacy

Austrade received no complaints under the Privacy Act 1988 during 2014-15. Training on the Privacy Act is provided annually to all staff as part of Austrade’s annual policy refresher course.

Freedom of information

Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information to the public as part of the Information Publication Scheme. This requirement is in PartII of the FOIAct, which has replaced the formal requirement to publish a section8statement in an annual report. Austrade meets its obligations under the FOIAct by displaying on its website, www.austrade.gov.au, a plan showing what information is published in accordance with the requirements of the Information Publication Scheme.

Management of human resources Austrade’s human resources strategy draws on the agency’s strategic objectives and business context to identify key workforce capability needs and directions. The strategy addresses organisational capability and capacity challenges, and provides a framework for compliance with public sector governance requirements and alignment with leading practice.

Austrade’s Executive and managers are accountable for workforce planning, capability development and performance management for their respective business areas and for the effectiveness of workforce decisions. Human resource managers onshore and offshore act as business partners, providing

frameworks, strategies, tools and advice to support Austrade’s business areas to achieve their objectives.

Key areas of focus for Austrade in managing and developing its workforce during 2014-15 are outlined below.

Employee engagement

The 2014 Australian Public Service (APS) employee census sought employee views on a range of workplace and employment matters, and allowed Austrade to compare its census results with similar APS agencies, and also to make comparisons with overall APS averages and 2013 agency data. In the 2014 census, Austrade achieved a 67per cent response rate, covering both Australia-based and overseas-engaged employees, which was in line with its 2013 participation rate.

Austrade’s 2014 results followed similarly strong results in 2013, with Austrade’s results consistently higher than the outcomes for comparative specialist APS agencies46 and the overall APS benchmark results. Austrade achieved improvement across three of the four pillars of employee engagement (team engagement, supervisor engagement and agency engagement), with trend lines significantly above the total for APS and specialist agencies.

Employment framework

Austrade’s employment framework provides flexible and responsive people management policies, practices and conditions. Austrade offers a range of employment instruments that

46 See AttachmentB of the 2013-14 State of the service report, p.15, for details on the cluster of other specialist agencies for the purposes of comparison.

146 Australian Trade Commission Annual Report 2014-15

provide competitive terms and conditions to support the diverse needs of its global workforce and drive a positive working environment.

Austrade is committed to complying with government policy and meeting its legislative obligations within Australia and in the countries in which it engages local employees. Its overseas terms and conditions of employment are reviewed regularly to ensure compliance with local labour laws and, where feasible, to align with APS employment conditions.

The Austrade Enterprise Agreement 2012-2014 has been in place since July 2012 and covers all Australia-based non-Senior Executive Service (SES) employees. While the agreement nominally expired on 30June 2014, it will continue to govern the terms and conditions of all Australia-based Austrade performance level (APL) 1-5 employees until a new agreement is in place.

Austrade undertook internal consultation with key stakeholders to commence negotiations for a replacement agreement throughout the year, with bargaining commencing in April 2015. At 30June 2015, bargaining was still in progress.

Austrade’s SES and overseas-engaged employees are employed under individual employment contracts. At 30June 2015, 60substantive SES employees had their terms and conditions of employment contained in common law contracts, and 489overseas-engaged employees were engaged on individual contracts under the terms and conditions of employment for the country in which they were employed (see Table17).

Individual flexibility arrangements

Austrade’s enterprise agreement allows for individual flexibility arrangements that vary the terms of the agreement in relation to when work is performed, allowances, remuneration and leave. At 30June 2015, 50non-SES employees had individual flexibility arrangements in place (see Table17).

Workplace Relations Committee

Austrade’s Workplace Relations Committee, which represents APL1-5 employees, met twice during the year to facilitate consultation between management and employee representatives on a range of workplace matters, including Austrade’s financial position and framework, and the process for bargaining a replacement enterprise agreement.

Bargaining for the incoming enterprise agreement is likely to include discussion of a number of potential productivity gains over the life of the agreement. Details of these productivity gains will be made available when the agreement is finalised.

SES remuneration

Austrade’s CEO determines SES remuneration and conditions of employment in accordance with section24(1) of the Public Service Act 1999 and the APS Executive Remuneration Management Policy.

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Table 17: Austrade employees covered by workplace, collective, common law, and individual flexibility agreements at 30 June 2015

Collective Common law Section 24(1) Individual flexibility agreement agreement determination(a) arrangement

Salary Salary Salary Salary

Classification range ($) No. range ($) No. range ($) No. range ($) No. Total

Cadet n.a. 0 n.a. 0 n.a. 0 n.a. 0 0

APS 1-4 47,310- 36 n.a. 0 n.a. 0 —(b) 2 38

APL 1 67,651

APS 5-6 70,357- 117 n.a. 0 n.a. 0 —(b) 3 120

APL 2 86,215

Exec. Level 1 91,818- 157 n.a. 0 n.a. 0 103,765- 11 168

APL 3 103,284 123,000

Exec. Level 2 107,414- 128 n.a. 0 n.a. 0 129,777- 34 162

APL 4-5 145,388 157,255

SES —(b) 5 155,035- 60 n.a. 0 —(b) 2 67

288,249

Total 443 60 0 52 555

(a) Determination made under section24(1) of the Public Service Act 1999.

(b) Where there is a possibility that payments to individuals may be identified (that is, five or fewer employees at a classification level), the salary range is not shown.

Note: Excludes CEO. Includes six substantive non-SES employees who are acting SES.

Austrade’s SES remuneration includes a taxable allowance for onshore SES, in lieu of an executive vehicle scheme. SES contracts provide for an annual review, with increases generally paid in September each year. However, there is no guarantee that an increase will occur as consideration is also given to comparative APS data and relevant economic and market data, as well as the approach taken to APL1-5 employees.

Australia-based APL1-5 employees did not receive an increase on 1July 2014 due to the continuation of Austrade’s current enterprise agreement. With this and other budget considerations in mind, including an APS directive that SES adjustments be in line with the Australian Government Public Sector Workplace Bargaining Policy, the CEO decided to defer determination of any increase for SES employees until later in 2015.

148 Australian Trade Commission Annual Report 2014-15

Workforce planning and demographics

Austrade actively manages its workforce to meet its objectives within its funding parameters. Austrade’s workforce planning has a mid- to long-term focus, while still being responsive to operational resource planning scenarios.

At 30 June 2015, Austrade employed 1,045staff, 69per cent of whom were employed in client-focused operations in Australia and overseas. The gender balance for 2014-15 was 56percent female and 44percent male, and staff turnover was 7.2per cent compared with 13.5per cent in 2013-14.

The following tables provide a snapshot of Austrade’s workforce at 30June 2015,

specifically in relation to the number of full-time and part-time ongoing and non-ongoing employees (Table18), the number of employees who identify as Indigenous (Table 19), the total number of Austrade employees by category of employment and gender (Table20), employees by classification, location and gender (Table21), employees by location and gender (Table22), and employees by group or division, both in Australia and offshore (Table23).

Tables 24, 25 and 26 provide a breakdown of Austrade’s SES employees by classification, gender and location, as well as SES gains and losses for the year.

Table 18: Ongoing and non-ongoing employees (excluding overseas-engaged employees), full-time and part-time, at 30 June 2015

Non-ongoing employees Ongoing employees Total Total

Full-time Part-time Full-time Part-time 30 June 2015 30 June 2014

42 12 445 57 556 546

Note: Includes staff on leave without pay and long-term leave. Includes CEO.

Table 19: Ongoing and non-ongoing employees (excluding overseas-engaged employees), full-time and part-time, who identify as Indigenous at 30 June 2015

Non-ongoing employees Ongoing employees Total Total

Full-time Part-time Full-time Part-time 30 June 2015 30 June 2014

0 0 3 0 3 3

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Table 20: Employees by category of employment and gender at 30 June 2015

Category Female Male Total 30 June 2015 Total 30 June 2014

Ongoing 261 241 502 520

Non-ongoing 36 18 54 26

Overseas-engaged employees 292 197 489 486

Total 589 456 1,045 1,032

Note: Includes staff on leave without pay and long-term leave. Includes CEO. Overseas-engaged employee figures include temporary staff.

Table 21: Employees by classification, gender and location at 30 June 2015

Australia Australia Overseas Overseas Total staff Total staff

Category female male female male 30 June 2015 30 June 2014

AOPL 1 0 0 2 24 26 26

AOPL 2 0 0 52 16 68 59

AOPL 3 0 0 133 47 180 180

AOPL 4 0 0 97 96 193 197

AOPL 5 0 0 8 14 22 24

APL 1 31 7 0 0 38 31

APL 2 82 38 0 0 120 134

APL 3 87 74 3 4 168 159

APL 4 40 50 10 18 118 110

APL 5 17 14 4 9 44 50

SES 1 8 21 8 9 46 41

SES 2 5 6 2 5 18 17

SES 3 0 3 0 0 3 3

CEO 0 1 0 0 1 1

Total 270 214 319 242 1,045 1,032

AOPL = Austrade overseas performance level Note: Includes temporary staff, and staff on leave without pay and long-term leave.

150 Australian Trade Commission Annual Report 2014-15

Table 22: Employees by location and gender at 30 June 2015

Market/ location

Australia-based female

Australia-based male

Australia-based total

OEE female OEE male

OEE total

Total

30 June 2015

Total

30 June 2014

Market

East Asian Growth Markets

11 17 28 130 51 181 209 213

Established Markets

11 12 23 110 61 171 194 188

Growth and Emerging Markets

5 16 21 52 85 137 158 157

Subtotal 27 45 72 292 197 489 561 558

Location

ACT 141 100 241 0 0 0 241 248

NSW 86 72 158 0 0 0 158 149

NT 1 0 1 0 0 0 1 1

QLD 7 10 17 0 0 0 17 15

SA 4 2 6 0 0 0 6 8

TAS 0 1 1 0 0 0 1 1

VIC 21 26 47 0 0 0 47 41

WA 10 3 13 0 0 0 13 11

Subtotal 270 214 484 0 0 0 484 474

Total 297 259 556 292 197 489 1,045 1,032

OEE = overseas-engaged employee

Note: Includes CEO, temporary staff, and staff on leave without pay and long-term leave. Excludes attached agency staff, trade consultants, contractors and TradeStart employees. At 30June 2015, there were 88attached agency staff within Austrade. Enabler staff are included in the market in which they are physically located. For example, enabler staff from the Frankfurt office are included in Established Markets.

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Table 23: Employees by group or division at 30 June 2015

Overseas- Total staff Total staff

Group/division

Australia-based

engaged employees

30 June 2015

30 June 2014

Australian Operations 0 0 0 139

Tourism, Education and Corporate Services 0 0 0 252

Human Resources 0 0 0 43

Established Markets 23 158 181 210

East Asian Growth Markets 28 176 204 178

Growth and Emerging Markets 20 133 153 153

International Operations Australia 139 0 139 15

Tourism, Investment, Education and Programmes 163 0 163 0

Corporate Services Group 137 22 159 0

Office of the CEO 17 0 17 19

Inoperative 29 0 29 23

Total 556 489 1,045 1,032

Note: Includes temporary staff, and staff on leave without pay and long-term leave. Excludes attached agency staff, trade consultants, contractors and TradesStart employees. International staff with a corporate focus are counted in their corporate division. Due to the restructure of Austrade’s onshore operations during 2014-15, figures are not comparable to 2013-14.

Table 24: Senior Executive Service by classification and gender at 30 June 2015

Category

SES 1

Australia

Overseas

Total 30 June 2015

Total 30 June 2014

SES 2 11 7 18 17

SES 3 3 0 3 3

Total 43 24 67 61

Note: Includes staff on leave without pay and long-term leave. Includes staff who are acting SES.

Table 26: Senior Executive Service gains and losses during 2014-15

2014-15 2013-14

Gains 15 11

Losses 9 9

Recruitment

Austrade’s recruitment activity during 2014-15 was guided by APS-wide policy parameters and guidelines, including the APS interim recruitment arrangements and APS work value review requirements. Austrade focused on ensuring all staffing action was critical to agency service delivery requirements, and that roles were scoped to ensure optimal contribution at level.

RecruitAbility

As part of its commitment to support the employment and career development of people with a disability, Austrade implemented the APS RecruitAbility scheme in April 2015. The scheme enhances Austrade’s recruitment process, enabling applicants with a disability to progress to a further stage in the recruitment process, as long as they have opted into the scheme and meet the minimum requirements for the position. This provides candidates with a disability with more opportunity to demonstrate their skills and experience for a role.

Capability development

Austrade’s capability development strategy supports its business priorities, with development initiatives linked to corporate capability frameworks. Talent is identified, managed and developed, with a talent pipeline established for critical onshore and offshore positions to maximise organisational performance and to minimise succession risk.

Managers and employees have joint responsibility for capability and career development, and have access to core skills and leadership development initiatives delivered through a blend of learning options.

Throughout the year, Austrade staff participated in the following learning and development programmes:

âº 108 new staff attended Austrade’s induction programme

âº 10 staff participated in a pre-posting workshop âº 10 staff participated in the ‘Return to Australia’ programme for staff returning from posting

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âº 22 staff participated in women’s mentoring programmes

âº 37 staff participated in inward investment skills workshops

âº 989 staff completed a compulsory annual policy refresher e-learning course.

In 2014-15, Austrade continued to collaborate with the Australian Public Service Commission, through the memorandum of understanding on the Strategic Centre for Leadership, Learning and Development, to create APS-wide development initiatives. On behalf of the APS, the centre:

âº provides contemporary research and thinking on leadership, learning and development

âº delivers an annual whole-of-APS leadership and core skills strategy

âº designs, develops and delivers APS talent and leadership programmes

âº designs, develops and delivers APS core and management skills programmes

âº develops and delivers accredited learning and development programmes

âº delivers learning and development events.

Core programmes

Austrade recognises that the vast majority of learning occurs on the job, so capability development is provided through a blend of learning options to cater for learning styles, geography and budget, including on-the-job training, coaching, mentoring, and online, internal and external courses.

Austrade’s core programmes for 2014-15 were designed to support employees with career transition, provide a comprehensive induction pathway for all new employees, prepare Australia-based employees for offshore

postings, and provide a re-entry programme to employees returning to Australia following an offshore posting.

Trade Commissioner Development Programme

The Trade Commissioner Development Programme, now in its third year, continued to provide an important pipeline for Austrade’s trade commissioner roles. The programme includes a three-month onshore component followed by a two-year offshore placement, giving participants the opportunity to gain hands-on experience and to develop the strategic, leadership, communication and tradecraft skills required to be a high-performing trade commissioner.

There were six participants selected for the 2015 intake. Participants commenced their onshore placements in April 2015, with two-year offshore placements to commence from July 2015 at Austrade offices in Beijing, Kuala Lumpur, Manila, New Delhi, Osaka and Shanghai.

Winning Investment for Australia course

The Winning Investment for Australia course, which has been running since 1998, is designed to build the knowledge, skills and capability of staff from federal and state and territory agencies with responsibility for investment promotion, attraction and facilitation.

Developed and delivered jointly by Austrade and an external investment practitioner, the course also helps to develop the professional networks necessary to attract foreign direct investment to Australia under the Commonwealth, states and territories partnership model.

The course was held in Adelaide in November 2014 and Melbourne in March 2015, with a

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modified version delivered in Darwin in May 2015. Approximately 100participants attended in total, including employees from Austrade, the Department of Foreign Affairs and Trade, and state and territory governments, as well as ministerial staff. A Winning Investment for Australia masterclass was also delivered in Sydney in May 2015 for Austrade’s senior investment managers and specialists.

Building cross-cultural competency and language capabilities

Austrade continued its investment in developing cross-cultural competency and language capabilities in its people. A range of measures have been put in place to enhance staff capabilities and improve their awareness and knowledge of the issues of working and managing across cultures, including cross-cultural workshops and access to a suite of cross-cultural resources and online tools.

Austrade’s language policy encourages, rewards and supports staff in the maintenance of languages important to Austrade’s business requirements. Austrade’s priority languages are Arabic, Bahasa Indonesian, Cantonese, Hindi, Japanese, Mandarin and Spanish. Austrade’s capabilities in these priority languages are shown in Table27.

Table 27: Foreign language capabilities at Austrade, priority languages, at 30June 2015

Language

Total number of speakers

Arabic 10

Bahasa Indonesian

Cantonese 32

Hindi 20

Japanese 56

Mandarin 91

Spanish 55

Total 284

Inclusive Leadership Programme

In 2014-15, Austrade sourced a new globally researched, multimedia-based educational programme designed to help leaders with the practical ‘how to’ associated with diversity and inclusion. The programme, called Courage: Inclusive Leadership in Action, will be delivered in kit form comprising audio, video (CDs, DVDs and USB) and a workbook guide. It will be undertaken over a 10-week period, with participants interacting via videoconference, email and working groups. The first programme is expected to be delivered to participants early in 2015-16.

1,045 staff employed by Austrade

69% employed in client-focused operations

489 overseas-engaged employees

284 speakers of priority foreign languages

Part 03 / Management and accountability. Management of human resources 155

Austrade’s scholarship programme

The following scholarships were awarded during the year as part of Austrade’s scholarship programme:

âº Beryl Wilson Austrade Scholarship for Women in International Business—This scholarship was established in November 2013, in recognition of Beryl Wilson, who was appointed in 1963 as Australia’s first female trade commissioner. The scholarship is awarded to a female student enrolled full-time in postgraduate international business studies. The 2015 recipient, Fei Li from Melbourne, was announced by the Hon Andrew RobbAOMP, Minister for Trade and Investment, in February 2015. For further information, see page47.

âº Overseas-Engaged Employees’ Scholarships—Introduced in 2013, these scholarships provide opportunities for staff to undertake development programmes at recognised educational institutions to enhance their skills and capabilities in international trade, leadership and strategy. Eight overseas-engaged employees from Jakarta, Milan, New Delhi, Taipei, Sao Paulo, Mumbai, Shanghai and New York received scholarships in 2014-15, and are undertaking further study in areas such as leadership, management and strategy.

âº Asialink Leaders Programme scholarships— Austrade continued its involvement in the Asialink Leaders Programme, providing one Australia-based employee with a scholarship to participate in the 2015 programme.

The programme helps to build knowledge of contemporary Asian societies and business culture and enhances recipients’ cultural intelligence skills to help them more effectively manage the complexity of Australia-Asia relations.

âº Austrade Craig Senger Scholarship—This annual scholarship was established jointly with Monash University in memory of the late Craig Senger, former Trade Commissioner in Jakarta. This year, the scholarship was awarded to Zoe Van Gulick. Zoe will begin an internship with Austrade in its Melbourne office in late July 2015.

Last year’s recipient of the Austrade Craig Senger Scholarship, Melissa Paciepnik, completed the first phase of a disaster management scoping project throughout the year, with the support of Austrade’s urban sustainability team leader. The first phase of the project delivered a database of more than 80Australian companies in the natural disaster management field, as well as more than a dozen case studies of international expertise. The database has since been used by Austrade to assist with organising a high-level visit programme to the Philippines in April 2015 to support the rebuild, recovery and future disaster mitigation efforts following Typhoon Haiyan in November 2013. The second stage of the project is underway and involves the development of an online portal of Australian capability.

Pictured: Melissa Paciepnik, the 2013-14 recipient of the Austrade Craig Senger Scholarship, with Leigh Wilmott from Austrade’s Infrastructure Trade Team. Photo: Austrade.

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Short-term overseas assignments

Short-term overseas assignments in Australian and overseas offices meet operational requirements while also providing both onshore and offshore staff with significant development opportunities. A typical short-term overseas assignment is between 10 to 12weeks in duration. In 2014-15, 41staff participated in short-term overseas assignments, with six of those assigned to Asian offices, including Manila, Shanghai, Hanoi and Tokyo.

Managing performance

Austrade’s performance management framework aligns individual objectives with Austrade’s strategic objectives. Managers and staff are required to set objectives and performance expectations for the year ahead, and meet regularly to review progress and discuss development requirements. At year end, performance is formally assessed and the level of performance is acknowledged and recognised. Where poor performance is identified, performance plans are further developed to work on improving performance so that it meets the required standards.

Austrade’s performance management process encourages development and builds organisational and individual capability. It also helps to ensure that workplace behaviours of both managers and staff are consistent with APS values and employment principles.

Austrade no longer pays performance bonuses to its employees. As such, there were no performance-related payments to report for 2014-15.

Employee recognition

Austrade continues to value high performance, commitment and excellence at the team and individual level from its employees in Australia and offshore, and formally recognises strong performance through its Global Austrade Staff Awards and the Australia Day Achievement Medallions.

Global Austrade Staff Awards

The Global Austrade Staff Awards recognise outstanding performance by individuals and teams in four categories:

âº promoting a team approach and spirit through the team’s actions and accomplishments

âº delivering value to stakeholders âº exemplary leadership âº working in the national interest.

In 2014-15, there were five individual and five team recipients. These were:

âº Heath Baker, Sydney âº Stephanie Julienne, Canberra âº Katsue Kagami, Tokyo âº Imran Saeed, Lahore

âº Lily Wu, Shanghai âº Data Centre Relocation Project Team âº Japan Oyster Project Team âº Regional Research and Insights Team

âº Sustainable Fisheries Management Team âº Sydney Reception Team.

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Australia Day Achievement Medallions

In 2014-15, Austrade continued to participate in the APS-wide Australia Day Achievement Medallion programme. The programme acknowledges the achievements of public servants, either on special projects that have made a significant contribution to the nation, or through outstanding performance in their core duties. In January 2015, Australia Day Achievement Medallions were awarded to 10Austrade employees:

âº Josie Abdullah, Bandar Seri Begawan âº Kylie Bell, Mumbai âº Stella Cai, Shanghai âº Kathleen Devereaux, London

âº Spiro Kavadias, Canberra âº Kazuto Kimura, Tokyo âº David Ritson, Canberra âº Kerry Rooney, Canberra

âº Partha Sen, Kolkata âº Christopher Soh, Singapore.

Diversity and inclusion

Austrade is committed to ensuring that the workplace is free from discrimination and actively supports diversity and inclusion through a number of key initiatives focused on disability employment and Indigenous programmes, as well as initiatives to encourage gender equality.

Disability employment

To support its diversity strategy, Austrade participated in the Transition to Work disability employment programme, facilitated through the House With No Steps. The programme supports young people with a disability in the transition to adult life through a 12-week work experience

placement. Austrade provided work experience to a programme participant in its Tourism Division and Human Resources Branch in its Canberra office.

Prior to the commencement of this placement, Disability ACT delivered a Disability Training Awareness workshop to Austrade Canberra staff, focusing on strategies to assist them in communicating with people who have a cognitive impairment. The workshop was well attended and provided staff with an enhanced awareness and understanding of working with people with a disability.

Austrade’s participation in this programme aims to raise awareness of the advantages of working in a diverse workforce. Austrade has also developed a diversity portal that is accessible by all employees and provides links to a broad range of resources on disability.

Disability reporting in annual reports

Since 1994, Australian Government departments and agencies have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy.

In 2007-08, reporting on the employer role was transferred to the Australian Public Service Commission’s State of the Service report and the APS Statistical Bulletin. These reports are available at www.apsc.gov.au. From 2010-11, departments and agencies were no longer required to report on these functions.

158 Australian Trade Commission Annual Report 2014-15

The Commonwealth Disability Strategy has been overtaken by the National Disability Strategy 2010-2020, which sets out a 10-year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high-level two-yearly report will track progress against each of the six outcome areas of the strategy and present a picture of how people with disability are faring. The first of these reports can be found at www.dss.gov.au.

Reconciliation Action Plan and Indigenous programmes

Austrade recognises the importance of working towards achieving recognition, respect and change for Aboriginal and Torres Strait Islander peoples. Its Reconciliation Action Plan, now in its second year, provides a platform for Austrade to demonstrate its commitment to raising awareness and applying the principles of reconciliation in the workplace.

Since 2012, Austrade has recruited and retained three Indigenous employees through the Indigenous Australian Government Development Programme. The programme is well established and was awarded the APS Diversity Council Award for Indigenous Employment in 2014. Austrade uses the programme as its primary source of Indigenous employment; participants are provided with both professional and personal development, strengthening their capability to undertake a career within the APS.

In addition to its participation in this programme, Austrade also engaged a university cadet under the Indigenous Cadetship Support Programme throughout the year. Austrade provided a placement to Indigenous student, Bryce Sentance, who worked in a part-time capacity while continuing his university study (see page159).

Austrade’s Indigenous portal and the continuous improvement of the portal’s resources have made a significant difference to employees’ understanding and appreciation of a diverse workforce. The links to Indigenous resources have also helped raise awareness of Indigenous cultures, and reinforce the specific commitments that Austrade continues to make in the areas of employment, cultural awareness and capability building.

To further support its commitment to reconciliation and Indigenous employment, Austrade has in place an Indigenous Working Group and has nominated Marcia Kimball, Austrade’s Chief Operating Officer, as its Indigenous Champion. The working group works with the Indigenous Champion to represent the interests of Indigenous staff, communicate the benefits of a diverse workplace, promote network activities and initiatives, and provide input to Austrade’s policies, strategies, action plans and programmes.

L-R: Vickie Gouvoussis, Austrade, with Emma Johnston, Naomi Smith and Aubrey Ribbons, Indigenous cadets from the Indigenous Australian Government Development Programme. Emma is pictured after receiving her Diploma of Government in Project Management in Canberra, December 2014. Photo: Department of Education.

Part 03 / Management and accountability. Management of human resources 159

Bryce Sentance Indigenous Cadetship Support Programme, Sydney

Bryce Sentance joined Austrade in 2014 through the Indigenous Cadetship Support Programme, administered by the Department of Employment. The

programme enables Aboriginal and Torres Strait Islander university students to gain the professional qualifications and experience needed for a range of jobs in the private, public and community sectors. Austrade was the first government agency to take a cadet under the programme.

Bryce has had the opportunity to work at Austrade within the CEO’s office, and in the Advanced Manufacturing Trade Team, enabling him to develop an in-depth

understanding of Austrade’s role within the APS and the broader Australian business community. He has been engaged with Austrade while studying for a Bachelor of Global Studies at the University of Technology, Sydney.

Through this exposure, Bryce has strengthened his interpersonal skills and expanded on the skills gained in his previous employment within the aviation sector. ‘This internship has given me the opportunity to use the knowledge I’m gaining from university and apply it to practical business situations. I have enjoyed every moment, including my current short-term placement with Austrade Direct’, he said.

Pictured: Bryce Sentance during his presentation to conclude his cadetship. Photo: Austrade.

United Nations Women’s Empowerment Principles

In March 2015, Austrade was the first Australian Government agency to publicly endorse the United Nations Women’s Empowerment Principles. The principles offer guidance on how to encourage gender equality in business and the community. Austrade joined 21Australian businesses and more than 800businesses worldwide that have now endorsed the principles.

Austrade has undertaken a number of initiatives to improve the representation of women in its senior management team and to encourage diversity and inclusion in its global workforce. Endorsing these principles underscores

Austrade’s ongoing commitment to an equal and diverse workplace. Public support of the United Nations principles will further help to raise the profile of women within Australia’s international business community.

Research paper on women in Austrade

Research undertaken by Austrade during April and June 2014 led to a paper titled ‘How women in Austrade experience the organisation’, which recommended a series of actions that have now been adopted by Austrade. These include providing developmental support to female employees and managers, providing more targeted development opportunities, and increasing career support and opportunities for

160 Australian Trade Commission Annual Report 2014-15

women in the organisation. Austrade’s Executive plays a lead role in communicating Austrade’s commitment to women in management and in its gender equity programmes.

Work environment and workplace support

Austrade continued to promote a strong safety culture throughout the organisation in 2014-15, and had systems in place to meet Australian standards and ensure compliance with the requirements of the Work Health and Safety Act 2011. In accordance with Schedule2, Part4 of the Act, details of Austrade’s work health and safety initiatives and activities, outcomes, statistics and investigations, where relevant, are reported in AppendixC.

Austrade works proactively and respectfully with individuals to ensure that personal injury case management is effective and that employees are able to return to work as soon as possible. Return-to-work strategies are implemented for all employees, irrespective of workers compensation claims or out-of-work injuries.

Employee assistance programme

Austrade launched its Livewell employee assistance programme, through its provider, Optum, in July 2014. The online programme gives employees access to information, advice and support to help improve wellness and wellbeing.

The Livewell programme also provides guidance to help improve aspects of the employee’s personal and work life balance, through access to articles, resources and interactive tools and content. Resources are designed to assist employees to plan and prepare for upcoming life events or manage ongoing challenges.

Other wellbeing and support programmes

Austrade participates in Mental Health Month, a national event which occurs in October each year, with the aim of raising community awareness and understanding of mental illness, encouraging the reduction of stigma and discrimination against people living with mental illness, and promoting positive mental health and wellbeing.

In October 2014, Austrade engaged the Black Dog Institute to deliver face-to-face workshops with staff in Australian offices. The sessions, titled ‘Mental health in the workplace is everybody’s business’, were delivered by clinicians with practical experience and qualifications in mental health. The sessions were well attended and provided employees with evidence-based strategies for building good mental health and wellbeing.

Austrade also hosted the Australian Network on Disability (AND) roundtable forum in Canberra in March 2015. AND is a not-for-profit organisation resourced by its members to advance the inclusion of people with a disability in all aspects of business. It assists in developing the behaviours, attitudes, systems and knowledge to successfully engage with people with a disability as employees, customers and stakeholders.

Austrade’s Chief Operating Officer, Marcia Kimball, and Disability Champion, Paula Barnett, welcomed forum attendees and addressed the group on the importance of inclusion, and the lead role government agencies play in overcoming barriers to employment for people with a disability.

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Financial management and business assurance Austrade manages its assets and financial resources to support its operations by maintaining:

âº an effective system of management and internal controls

âº accounting, treasury and taxation services âº procurement systems and processes that achieve value for money

âº business systems and processes that provide financial and performance information to enhance decision-making and the efficient, effective, economical and ethical use of resources

âº information technology that is stable and secure and increases connectivity for staff, clients and key stakeholders

âº systems to monitor, safeguard and enhance property and other assets.

Information on Austrade’s financial performance is provided on page13 and in its financial statements starting on page 169.

Property management

Austrade manages an overseas and domestic property portfolio of 169leased commercial and residential properties. The portfolio comprises properties leased from the Overseas Property Office in the Department of Foreign Affairs and Trade and from private sector landlords.

In 2014-15, 16security and property fit-outs were completed, improving the safety and security of Austrade staff, customers and assets. This included a move to new premises for the Australian Consulate-General in Bogota, Colombia, and the opening of the new Australian Consulate-General in Houston, United States. Austrade also established a new office in Zurich, Switzerland, which will be formally opened early in 2015-16.

Austrade negotiated 76new leases and renewed 75leases as part of the ongoing management of its property portfolio. Austrade also continued to identify opportunities for maximising efficiencies and cost-effectiveness in managing its property portfolio. This was achieved through the relocation of its Perth office, which resulted in a reduction of surplus space and a more cost-effective lease, while complying with work health and safety legislation and relevant building codes and standards.

Business continuity planning

Austrade continued to strengthen its business continuity programme throughout the year to build resilience across its network of domestic and international offices. Staff knowledge and understanding of business continuity was consolidated through training and scenario-based exercises conducted across the network.

Austrade worked closely with the Department of Foreign Affairs and Trade to ensure consistency in its approach to business continuity planning and testing.

During the year, Austrade’s business continuity and crisis management and response framework continued to prove effective in mitigating risks attributed to a number of major incidents requiring the activation or review of business continuity plans. These included severe water shortages in Sao Paulo (see page 131); tropical cyclones in Queensland; the Lindt cafe hostage crisis in Sydney; typhoons in Manila, Fukuoka, Osaka and Hong Kong; and pandemic threats in Accra.

162 Australian Trade Commission Annual Report 2014-15

Security

During 2014-15, Austrade made further enhancements to its security management framework to ensure the personal safety and protection of Austrade staff, contractors and clients, and the continued protection of official information and valuable assets.

Driven by recommendations made in Austrade’s protective security and personnel security risk assessments, these enhancements focused on improved training and security awareness, and progressing towards compliance with the Australian Government Protective Security Policy Framework.

Austrade continued to work closely with other government agencies, including the Department of Foreign Affairs and Trade and the Australian Signals Directorate, to develop and implement appropriate security risk mitigation strategies.

Legal services

In 2014-15, legal services to Austrade were provided by its internal legal team, supported by external law firms. Under arrangements administered by the Attorney-General’s Department, through the Office of Legal Services Coordination, Austrade also has access to a multi-use list of prequalified law firms, which are split into four areas of legal expertise. This provides Austrade with access to a broad range of prequalified legal service providers with government law experience who can deliver high-quality, cost-effective specialist external legal services as the need arises. The collection and publishing of information on legal service providers through the multi-use list improves the quality of the legal services engaged by Austrade and the Commonwealth.

The same standards that apply to Austrade’s domestic legal service providers under Office of Legal Services Coordination arrangements are also applied to all locally engaged international law firms that provide services to Austrade’s overseas network.

The legal services provided by external providers to Austrade during the year covered a broad range of legal disciplines and reflected an increase in volume and complexity, particularly with the additional responsibility in relation to Austrade’s role as a nominator in the Significant Investor and Premium Investor Visa programmes under the Migration Act 1958. Legal services also included work relating to ministerial missions and events, and the application of new legislation such as the Public Interest Disclosure Act 2013.

In addition, demand for internal services increased markedly, particularly in relation to commercial advice, Export Market Development Grants scheme litigation support, other grants and programme initiatives. In other aspects, Austrade’s demand for legal services continued at similar levels as in recent years, including:

âº complex contractual negotiations and drafting of agreements, including leases, service proposals and major programme arrangements, such as TradeStart and tourism grant programmes (exemptions, qualifications and collections)

âº advice and application of policy on aspects of trade facilitation, financial services, education programmes and contractual arrangements

âº handling of sensitive issues arising from labour claims, complaints from clients and commercial disputes, and issues arising from Austrade’s day-to-day delivery of its services

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âº internal staff training on compliance with anti-bribery laws as well as an outreach programme to business

âº privacy and freedom of information policy and advice

âº commercial litigation and appeals under the Administrative Appeals Tribunal Act 1975, mainly involving applications under the Export Market Development Grants scheme

âº advice on insurance, legislation, Austrade partner arrangements and trade disputes

âº monitoring and maintaining the quality and consistency of legal services to business units and Austrade’s international network in compliance with the Office of Legal Services Coordination standards.

Purchasing

Austrade’s approach to procuring goods and services, including consultancies, is consistent with, and reflects the principles of, the Commonwealth Procurement Rules. These rules are applied to activities through the Chief Executive’s Instructions, supporting operational guidelines and Austrade’s procurement framework.

The core value underpinning the Commonwealth Procurement Rules is value for money. Austrade’s Chief Executive’s Instructions and departmental policies have been developed to ensure that it undertakes competitive, non-discriminatory procurement processes, and uses its resources efficiently, effectively, economically and ethically, while making decisions in an accountable and transparent manner.

Austrade supports its employees in managing procurements by providing information and training on procurement policies and procedures, and maintaining

a central point of contact for advice on the Commonwealth Procurement Rules, Chief Executive’s Instructions, and procurement and contracting processes.

No contracts of $100,000 or more were let during 2014-15 that did not provide for the Auditor-General to have access to the contractor’s premises.

No contracts in excess of $10,000 (inclusive of GST) or standing offers were exempted by the CEO from being published on AusTender on the basis that they would disclose exempt matters under the Freedom of Information Act 1982.

Information on publicly available business opportunities with an estimated value of $80,000 or more, expected to be undertaken in 2014-15, are published in Austrade’s annual procurement plan, available from the AusTender website at www.tenders.gov.au.

Consultants

Austrade engages consultants when it requires specialist expertise or when independent research, review, advice or assessment is required.

Before engaging consultants, Austrade takes into account the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the Public Governance, Performance and Accountability Act 2013 and related rules, including the Commonwealth Procurement Rules and relevant internal policies.

During 2014-15, 48 new consultancy contracts were entered into involving total actual expenditure of $2,765,052. In addition, 10 ongoing consultancy contracts were

164 Australian Trade Commission Annual Report 2014-15

active during 2014-15, involving total actual expenditure of $508,668. Table28 provides five-year trend information on Austrade’s consultancy contracts.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website at www.tenders.gov.au.

Procurement initiatives to support small business

Austrade supports small business participation in the Commonwealth government procurement market. Statistics on the participation in procurement contracts of small and medium-sized enterprises (SMEs) (fewer than 200employees) and small enterprises (fewer than 20employees) are available on the Department of Finance’s website at www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts.

Austrade recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government

Payments to Small Business are available on the Treasury’s website, www.treasury.gov.au.

To ensure that SMEs can engage in fair competition for Australian Government business, Austrade has adopted procurement practices that support SMEs, which is consistent with paragraph5.4 of the Commonwealth Procurement Rules, including, but not limited to:

âº use of the Commonwealth Contracting Suite for low-risk procurements valued under $200,000

âº electronic systems and other processes used to facilitate on-time payment, including the use of payment cards for eligible procurements valued under $10,000

âº mandated competitive sourcing processes for all procurements valued at $10,000 or more where there is a competitive market

âº engaging in non-discriminatory procurement sourcing and contracting practices.

Table 28: Trends in consultancies, 2010-11 to 2014-15

Consultancies 2010-11 2011-12 2012-13 2013-14 2014-15

Number of existing consultancies

11 7 11 10 10

Number of new consultancies 74 94 18 45 48

Total consultancies 85 101 29 55 58

Total expenditure ($) 4,363,070 2,075,520 842,829 3,279,724 3,273,720

Part 03 / Management and accountability. Managing knowledge and information 165

Managing knowledge and information Austrade’s knowledge and information systems underpin its role of advancing Australia’s trade, investment, international education and tourism interests through information, advice and services to businesses, the education sector and government.

Austrade’s information technology connects staff across its network of 79 overseas locations in 47markets, as well as 10offices in Australia.

It facilitates the connection of Australian and foreign businesses and institutions with Austrade in order to pursue trade, investment, tourism and international education opportunities.

The Austrade ICT Strategy and Four-Year Plan: 2013-2017 outlines the overarching approach to the management of Austrade’s ICT resources to meet its future needs. The key themes include:

âº accessible and available Austrade information to clients and stakeholders

âº enhanced capture and use of Austrade information to improve effectiveness, provide insight and guide decisions

âº a ‘better connected Austrade’ by providing flexible ways to communicate and collaborate

âº improved service delivery over the network.

Business systems

Austrade’s Relationship Management System is the core business system for managing and sharing information about Austrade’s relationships and interactions with other organisations.

Two main updates were implemented for the Relationship Management System throughout the year. The first delivered further integration with the Austrade website, providing a process

for onboarding of referral service providers, as well as richer segmentation of information, enhancing the ability to target information for future events and opportunities. This work continues to build on the foundations from the previous year. The second update streamlines the system to improve the ways in which Austrade manages and services trade opportunities.

In 2014-15, Austrade made further enhancements to ‘The Hub’, an integrated system and single entry point for access to Austrade’s core knowledge and information assets, which was implemented in 2013-14. Enhancements focused on improvements to the search functionality, as well as the redevelopment of the homepage and news portal. Some technical performance tuning work was also undertaken to increase responsiveness and performance at Austrade’s offices offshore.

In 2015-16, The Hub will continue to evolve as planned improvements to usability and archiving are implemented.

Data centres, hosting and cloud-based service delivery

In 2014-15, Austrade successfully migrated its data centres to externally managed, government-approved off-site facilities, and re-engineered and redesigned its service delivery, using an internal cloud approach. The Austrade ICT environment is now 100per cent virtualised, and ICT workloads are no longer tied directly to the hardware resources and infrastructure they run, which allows for greater efficiency, flexibility and improved use of ICT resources. It is also an important step in terms of shifting appropriate ICT workloads to the cloud.

166 Australian Trade Commission Annual Report 2014-15

The new data centres and technologies have changed the way ICT operations are run by providing greater automation, improving reliability and availability, occupying less floor space, making more efficient use of ICT equipment, and consuming less power.

The migration project was run on time and to budget. The success of this project was recognised corporately, with the Austrade project team receiving a 2014 Global Austrade Staff Award (see page156).

In parallel, Austrade continues to take advantage of cloud computing and hosting arrangements where applicable. As a result, a number of Austrade’s IT workloads have been migrated to external facilities, hosting companies and ‘software as a service’ providers.

Austrade has adopted a new cloud service policy consistent with the Australian Government Cloud Computing Policy, which requires all initiatives to be reviewed for compatibility in situations where they demonstrate value for money and adequate security.

Enterprise mobility

A key component of Austrade’s ICT strategy is to support its highly mobile workforce and provide contemporary ICT solutions for the ever-changing way in which Austrade staff work. In 2014-15, Austrade continued its focus on delivering its enterprise mobility programme called ‘Austrade on the Go’. The key elements are:

âº a software, workstation and portability programme, called ‘SWAPP2015’, to replace Austrade’s existing fleet of desktops and

notebooks with lighter and faster computers and updated business software. This will provide better performing devices with increased mobility and portability

âº secure wireless connectivity in the majority of Austrade office locations worldwide to enable staff to work more flexibly in the office

âº deployment of a mobile solution for secure access to corporate information from devices such as smartphones. This work has included the introduction of a new ‘bring your own device’ policy that enables a greater number of Austrade staff to gain access to corporate information

âº Austrade Anywhere—a remote access facility for staff to be able to gain secure access to core ICT services from non-corporate computers and devices. Austrade will continue to enhance this service in 2015-16.

Wide area network

Austrade is collaborating with the Department of Foreign Affairs and Trade on a joint initiative to market-test wide area network service contracts, through a single procurement exercise. This will result in one vendor, which will provide services to both agencies, with customised management, technical and financial arrangements in place to suit the specific needs of each agency. Economies of scale in purchasing, and the removal of duplicate telecommunications infrastructure where the agencies co-locate, are two of the key benefits Austrade aims to achieve from this initiative, as well as an overall reduction in operational costs.

Part 03 / Management and accountability. Managing knowledge and information 167

Information security

Austrade continued to strengthen its information security framework in 2014-15, particularly in response to the increased volume and sophistication of cyber attacks. Of specific note was the enhanced protection provided through the facilities and technologies at Austrade’s new data centres. Austrade is in the final phase of the security assessment and accreditation of the data centres to ensure effective security measures are in place to protect its information assets.

Web accessibility

The Australian Government Information Management Office (AGIMO) has published and mandated compliance with Web Content Accessibility Guidelines at various levels over a number of years.

Austrade continues to focus on making its ICT systems compliant for web accessibility so that its content is accessible by people with a diverse range of hearing, movement, sight and cognitive abilities. This has included work on its public-facing websites, including www.austrade.gov.au and www.studyinaustralia.gov.au. Austrade provides formal feedback regarding Web Content Accessibility Guidelines via the AGIMO Web Accessibility National Transition Strategy survey.

Other business projects and key ICT initiatives

Austrade also provided specific ICT support for a range of corporate projects throughout the year, including support for the upcoming Significant Investor and Premium Investor Visa programmes, which will be coming online in the next financial year, revising the corporate market planning tool to meet 2014-15 planning cycle needs, and establishing Austrade’s connection to the whole-of-government Parliamentary Workflow System.

Other key ICT initiatives delivered by Austrade during 2014-15 included:

âº the introduction of a contemporary IT support system, which improved the tracking and management of support issues across Austrade’s globally dispersed network

âº the implementation of a ‘small office solution’ to provide small Austrade offices with connectivity and access to key services

âº the completion of an ‘Enterprise Vault’ repository that helps users manage email and provides a central, searchable and reliable repository for all Austrade email

âº continued enhancements of system monitoring technology to enable better IT support for Austrade users and proactive identification of potential issues.

168 Australian Trade Commission Annual Report 2014-15

ICT solutions for a highly-mobile workforce

Austrade’s Information and Technology Services Branch is delivering contemporary solutions that enable staff to stay connected and in touch with clients and colleagues across its extensive global network.

In 2014-15, the ‘Austrade on the Go’ programme, illustrated in Figure 29, delivered a number of key initiatives that provide easy-to-use mobile access to Austrade information. The aim of these initiatives is to allow staff to dedicate more time to client interaction and decrease time spent working in the office.

The programme’s mobility component provides staff with options to securely access Austrade information using mobile devices such as smartphones and tablets. Eligible staff have access to the ‘Corporate Container’ mobility solution from either an Austrade-owned (choose your own device) or their own (bring your own device) compatible mobile device. The solution is designed to be device-independent in response to the rapid pace of change in the mobile device market.

Austrade’s mobile and globally distributed workforce rely on being effective and efficient collaborators and communicators. Austrade’s SWAPP2015 desktop equipment replacement focused on providing tools and services to enhance collaboration and communication. This delivered a range of new tools and services that enable staff to work in a way that best suits their needs. Integrated

voice capability, instant messaging, video conference facilities and the rollout of wi-fi networks provide staff with collaboration and communication options while in the office and on the go.

Progress made in 2014-15 to deliver core functionality from the Austrade on the Go programme is strengthening the way the agency operates. Austrade’s highly mobile workforce is now better equipped to assist Australian businesses, education institutions, tourism operators, governments and citizens contribute to Australia’s economic prosperity.

Figure 29: The Austrade on the Go programme

Austrade on the Go

C o rporate Conta in

e r

R emote acce ss wi-fi at post

SWAP P 2015

Austrade on the Go

C o rporate Conta in

e r

R emote acce ss wi-fi at post

SWAPP2015 = Software, Workstation and Portability Programme 2015

T R PA 04 FINANCIAL Sfor tT he pA eriod e T nEM ded 30 June 2 E 015NTS Independent auditor’s report 170

Certification of financial statements 172

Notes to and forming part of the financial statements 183

170 Australian Trade Commission Annual Report 2014-15

Independent auditor’s report

Part 04 / Financial statements 171

172 Australian Trade Commission Annual Report 2014-15

Certification of financial statements

Part 04 / Financial statements 173

Australian Trade Commission Statement of Comprehensive Income for the period ended 30 June 2015

2015 2014

Notes $'000 $'000

NET COST OF SERVICES Expenses Employee benefits 4A 129,294 124,641

Suppliers 4B 74,642 71,345

Depreciation and amortisation 8D 19,203 18,068

Write-down and impairment of assets - 12

Losses from asset sales 49 43

Foreign exchange losses

Total expenses

Own-Source Income

1,088 666

224,276 214,775

Own-source revenue Sale of goods and rendering of services 5A 22,913 20,975

Rental income 75 85

Other revenue 3,040 2,851

Total own-source revenue 26,028 23,911

Gains Other gains

Total gains

Total own-source income

5B 257 326

257 326

26,285 24,237

Net cost of services 197,991 190,538

Revenue from Government 182,483 176,760

Deficit attributable to the Australian Government

OTHER COMPREHENSIVE INCOME

(15,508) (13,778)

Items not subject to subsequent reclassification to net cost of services Change in asset revaluation surplus

Total other comprehensive income/(loss)

Total comprehensive income/(loss) attributable to the

304 3,697

Australian Government (15,204) (10,081)

The above statement should be read in conjunction with the accompanying notes.

174 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Statement of Financial Position as at 30 June 2015

2015 2014

Notes $'000 $'000

ASSETS Financial assets Cash and cash equivalents 5,881 3,594

Trade and other receivables 7A 47,674 43,108

Total financial assets 53,555 46,702

Non-financial assets Land and buildings 8A,D 13,382 14,346

Property, plant and equipment 8B,D 18,084 19,064

Intangibles 8C,D 21,735 22,586

Other non-financial assets 8E 7,769 7,913

Total non-financial assets 60,970 63,909

Total assets 114,525 110,611

LIABILITIES Payables Suppliers 9A 11,077 12,218

Other payables

Total payables

Provisions

9B 6,249 5,176

17,326 17,394

Employee provisions 10A 32,890 33,358

Other provisions

Total provisions

10B 1,395 2,342

34,285 35,700

Total liabilities 51,611 53,094

Net assets 62,914 57,517

EQUITY Contributed equity 87,302 66,701

Reserves 66,319 66,015

Retained surplus/(Accumulated deficit)

Total equity

(90,707) (75,199)

62,914 57,517

The above statement should be read in conjunction with the accompanying notes.

Part 04 / Financial statements 175

Australian Trade Commission Statement of Changes in Equity for the period ended 30 June 2015

Asset revaluation Contributed

Retained earnings surplus General reserve equity/capital Total equity

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Opening balance Balance carried forward from previous period

Adjusted opening balance

Comprehensive income

(75,199) (61,421)

27,290 23,593 38,725 38,725 66,701 62,572 57,517 63,469

Surplus/(Deficit) for the period (15,508) (13,778) (15,508) (13,778)

Other comprehensive income

Total comprehensive income

Transactions with owners

- -

(15,508) (13,778)

304 3,697 - - - - 304 3,697

304 3,697 - - - - (15,204) (10,081)

Distributions to owners Returns of capital - - - - - - - (4,818) - (4,818)

Restructuring - - - - - - - (2,073) - (2,073)

Contributions by owners Equity injection - - - - - - 3,314 - 3,314 -

Departmental capital budget

Total transactions with owners

Closing balance as at 30 June

- -

(90,707) (75,199)

- - - - 17,287 11,020 17,287 11,020

- - - - 20,601 4,129 20,601 4,129

27,594 27,290 38,725 38,725 87,302 66,701 62,914 57,517

The above statement should be read in conjunction with the accompanying notes.

176 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Cash Flow Statement for the period ended 30 June 2015

2015 2014

Notes $'000 $'000

OPERATING ACTIVITIES Cash received Appropriations 181,766 176,775

Sales of goods and rendering services 23,037 21,961

Net GST received 3,731 4,393

Other 2,781 2,649

Total cash received 211,315 205,778

Cash used Employees 129,599 124,723

Suppliers

Total cash used

78,998 77,321

208,597 202,044

Net cash from/(used by) operating activities

INVESTING ACTIVITIES

12 2,718 3,734

Cash received Proceeds from sales of property, plant and equipment

Total cash received

180 210

Cash used Purchase of property, plant and equipment

Total cash used

18,651 23,752

Net cash from/(used by) investing activities

FINANCING ACTIVITIES

(18,471) (23,542)

Cash received Contributed equity

Total cash received

18,040 19,928

Net cash from/(used by) financing activities 18,040 19,928

Net increase/(decrease) in cash held Cash and cash equivalents at the beginning of the reporting period

Cash and cash equivalents at the end of the reporting period

2,287 120

3,594 3,474

5,881 3,594

The above statement should be read in conjunction with the accompanying notes.

Part 04 / Financial statements 177

Australian Trade Commission Schedule of Commitments as at 30 June 2015

1 year to 5

2015 < 1 year years > 5 years Total

$'000 $'000 $'000 $'000

Commitments payable Property, plant and equipment1 778 352 - 1,130

Operating leases2 15,691 28,869 4,800 49,360

Other3 13,949 9,915 12 23,876

Total 30,418 39,136 4,812 74,366

Commitments receivable Sublease rental income 1,357 593 - 1,950

Net GST recoverable on commitments 1,522 2,045 171 3,738

Total 2,879 2,638 171 5,688

Net commitments 27,539 36,498 4,641 68,678

1 year to 5

2014 < 1 year years > 5 years Total

$'000 $'000 $'000 $'000

Commitments payable Property, plant and equipment1 763 1,039 - 1,802

Operating leases2 14,510 35,207 4,579 54,296

Other3 12,381 8,965 16 21,362

Total 27,654 45,211 4,595 77,460

Commitments receivable Sublease rental income 875 1,246 - 2,121

Net GST recoverable on commitments 1,553 2,332 368 4,253

Total

Net commitments

2,428 3,578 368 6,374

25,226 41,633 4,227 71,086

Note: Commitments are GST inclusive where relevant.

1 Property, plant and equipment commitments are primarily contracts for purchases of leasehold improvements and motor vehicles. 2 Operating leases, which relate primarily to office/residential accommodation, are effectively non-cancellable; they comprise:

Office and residential accommodation General description of leasing arrangement The Commission has leases with the Commonwealth, Department of Foreign Affairs and Trade and commercial landlords in Australia and overseas on terms and conditions negotiated in each market. The terms and conditions of the leases vary widely depending on the circumstances in the relevant country and the specific terms of each lease.

3 Other commitments mainly comprise contracts for Tradestart and contracts for IT services.

The above schedule should be read in conjunction with the accompanying notes.

178 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Administered Schedule of Comprehensive Income for the period ended 30 June 2015

2015 2014

Notes $'000 $'000

NET COST OF SERVICES Expenses Employee benefits 17A 5,234 5,419

Suppliers 17B 1,547 1,251

Grants 17C 139,220 117,937

124,607 Total expenses

Income

146,001

Revenue Non-taxation revenue Other revenue 270 372

372

372 372

(124,235) (124,235)

Total non-taxation revenue 270

Total revenue 270

Total income 270

Net (cost of)/contribution by services Deficit attributable to the Australian Government

OTHER COMPREHENSIVE INCOME

(145,731) (145,731)

Items not subject to subsequent reclassification to net cost of services Other comprehensive income

Total other comprehensive income Total comprehensive income/(loss)

(145,731)

(124,235)

The above schedule should be read in conjunction with the accompanying notes.

Part 04 / Financial statements 179

Australian Trade Commission Administered Schedule of Assets and Liabilities as at 30 June 2015

2015 2014

Notes $'000 $'000

ASSETS Financial assets Cash and cash equivalents - -

Trade and other receivables 18A 41 19

Total financial assets 41 19

Total assets administered on behalf of Government 41 19

LIABILITIES Payables Suppliers 19A 52 44

Grants 19B 635 473

Other payables

Total payables

Provisions

19C 153 179

840 696

Employee provisions 20A 1,882 1,709

Grants provisions

Total provisions

20B 6,066 8,996

7,948 10,705

Total liabilities administered on behalf of Government

Net assets/(liabilities)

8,788 11,401

(8,747) (11,382)

The above schedule should be read in conjunction with the accompanying notes.

180 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Administered Reconciliation Schedule

2015 2014

$'000 $'000

Opening assets less liabilities as at 1 July (11,382) (8,918)

Net (cost of)/contribution by services Income 270 372

Expenses Payments to entities other than corporate Commonwealth entities (146,001) (124,607)

Transfers (to)/from the Australian Government Appropriation transfers from Official Public Account Annual appropriations

Payments to entities other than corporate Commonwealth entities 148,758 122,147

Appropriation transfers to OPA Transfers to OPA

Closing assets less liabilities as at 30 June

(392)

(8,747)

(376)

(11,382)

The above schedule should be read in conjunction with the accompanying notes.

Part 04 / Financial statements 181

Australian Trade Commission Administered Cash Flow Statement for the period ended 30 June 2015

2015 2014

Notes $'000 $'000

OPERATING ACTIVITIES

Cash received Net GST received 165 159

Other 260 393

552 Total cash received 425

Cash used Employees 5,087 6,022

Suppliers 1,716 1,441

Grants 141,988 114,906

122,369

(121,817)

Total cash used 148,791

Net cash from/(used by) operating activities 21 (148,366)

Net increase/(decrease) in cash held

Cash and cash equivalents at the beginning of the reporting period

(148,366)

Cash from Official Public Account Appropriations

Total cash from official public account

Cash to Official Public Account

148,758 148,758

122,147 122,147

Other

Total cash to official public account

Cash and cash equivalents at the end of the reporting period

(392) (392)

(376) (376)

The above statement should be read in conjunction with the accompanying notes.

182 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Schedule of Administered Commitments as at 30 June 2015

1 year to 5

2015 < 1 year years > 5 years Total

$'000 $'000 $'000 $'000

Commitments payable Operating leases 393 965 192 1,550

Other1 1,292 292 - 1,584

Total 1,685 1,257 192 3,134

Commitments receivable Sublease rental income 9 6 - 15

Net GST recoverable on commitments 153 114 17 284

Total 162 120 17 299

Net commitments 1,523 1,137 175 2,835

1 year to 5

2014 < 1 year years > 5 years Total

$'000 $'000 $'000 $'000

Commitments payable Operating leases 415 1,044 402 1,861

Other1 750 1,457 - 2,207

Total 1,165 2,501 402 4,068

Commitments receivable Net GST recoverable on commitments 106 227 37 370

Total

Net commitments

106 227 37 370

1,059 2,274 365 3,698

Note: Commitments are GST inclusive where relevant.

1 The nature of other commitments is motor vehicle leasing and contracts for IT services.

The above schedule should be read in conjunction with the accompanying notes.

Notes to and forming part of the financial statements

Part 04 / Financial statements 183

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Table of Contents - Notes

Note 1: Summary of Significant Accounting Policies 184

Note 2: Events After t

he Reporting Period . 193

Note 3: Net Cash Appropriation Arrangements 194

Note 4: Expenses 194

Note 5: Own-Source Income 195

Note 6: Fair Value Measurements 196

te 7: Financ

ial Assets 199

Note 8: Non-Financial Assets 201

Note 9: Payables 205

Note 10: Pro

visions 206

Note 11: Restructuring 207

Note 12: Cash

Flow Reconciliation 208

Note 13: Contingent Assets and Liabilities 209

Note 14: Senior Management Personnel Remuneration 210

Note 15: Financial Instruments 211

Note 16: Financial Assets Reconciliation 215

te 17: Administered Expenses . 216

Note 18: Administered Financial Assets 217

Note 19: Administered Payables 219

Note 20: Administered Provisions 220

Note 21: Administered Cash Flow Reconciliation 221

Note 22: Administered Contingent Assets and Liabilities 222

Note 23: Administered Financial Instruments 222

Note 24: Administered Financial Assets Reconciliation 223

Note 25: Appropriations 224

Note 26: Special Accounts 229

Note 27: Assets Held in Trust 229

Note 28: Reporting of Outcomes 230

Note 29: Budgetary Reports and Explanations of Major Variances 233

184 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 1: Summary of Significant Accounting Policies

1.1 Objectives of the Australian Trade Commission

The Australian Trade Commission (the Commission) is an Australian Government controlled entity. It is a not-for-profit entity.

The Commission is the Australian Government’s international trade, education and investment promotion agency. It also has responsibility for tourism policy and research where the Government’s focus is on international tourism. The objective of the Commission is to contribute to Australia’s economic prosperity by helping Australian businesses, education institutions, associations, and governments as they develop international markets, win productive foreign investment, promote international education, and strengthen the Australian tourism industry.

The Commission is structured to meet the following outcomes:

Outcome 1: Contribute to Australia’s economic prosperity by promoting Australia’s export and other international economic interests through the provision of information, advice and services to business, associations, institutions and government.

Outcome 2: The protection and welfare of Australians abroad through timely and responsive consular and passport services in specific locations overseas.

The continued existence of the Commission in its present form and with its present programs is dependent on Government policy and on continuing funding by Parliament for the Commission's administration and programs.

The Commission's activities contributing toward these outcomes are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the Commission in its own right. Administered activities involve the management or oversight by the Commission, on behalf of the government, of items controlled or incurred by the government.

The Commission conducts the following administered activities on behalf of the Government:

ï· Export Market Development Grants Scheme; and ï· Asian Business Engagement Plan.

Part 04 / Financial statements 185

Australian Trade Commission Notes to and forming part of the financial statements

1.2 Basis of Preparation of the Financial Statements

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

The financial statements have been prepared in accordance with:

ï· Finance Reporting Rule (FRR) for reporting periods ending on or after 1 July 2014; and

ï· Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

Unless an alternative treatment is specifically required by an accounting standard or the FRR, assets and liabilities are recognised in the statement of financial position when and only when it is probable that future economic benefits will flow to the Commission or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the contingencies note

Unless an alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the statement of comprehensive income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

1.3 Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this note, the Commission has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

ï· The fair value of leasehold improvements has been taken to be the depreciated replacement cost as determined by an independent valuer by reference to the gross replacement cost;

ï· The fair value of plant and equipment has been determined by reference to the market value of similar assets;

ï· The liability for long service leave has been estimated using present value techniques, which take account of attrition rates and pay increases through promotion and inflation;

ï· The liability for grants lodged and payable under the EMDG Scheme but not yet determined has been estimated by reference to payment histories in previous years;

ï· The liability for grant appeals lodged under the EMDG Scheme but not yet finalised has been estimated by reference to successful appeals histories in previous years; and

ï· The provision for impairment of departmental financial assets has been determined by reference to collection histories in previous years and the current debt profile.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

186 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

1.4 New Australian Accounting Standards

Adoption of New Australian Accounting Standard Requirements

No accounting standard has been adopted earlier than the application date as stated in the standard.

The following new Standard was issued by the Australian Accounting Standards Board prior to the signing of the statement by the Chief Executive and Chief Finance Officer and had a material impact on the Commission’s financial statements:

Standard/ Interpretation Nature of change in accounting policy, transitional provisions1, and adjustment to financial statements AASB 1055 Budgetary Requires reporting of budgetary information by not-for-profit entities within the General Reporting Government Sector (however, comparative information is not required). In particular:

- original budget presented to Parliament; - variance of actuals from budget; and - explanations of significant variances.

1. When transitional provisions apply, all changes in accounting policy are made in accordance with their respective transitional provisions.

All other new, revised, or amending Standards or Interpretations that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect, and are not expected to have a future material effect, on the Commission’s financial statements.

Future Australian Accounting Standard Requirements

The following new, revised or amending Standards or Interpretations were issued by the Australian Accounting Standards Board prior to the signing of the statement by the Chief Executive and Chief Finance Officer, which are expected to have a material impact on the Commission’s financial statements for future reporting periods:

Standard/ Interpretation Application date for the Commission1

Nature of impending change/s initial application in accounting policy and likely impact on

AASB 15 Revenue from Contracts with Customers 1 July 2017 AASB 15:

- establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers, with revenue recognised as 'performance obligations' are satisfied; and - will apply to contracts of not-for-profit entities that are exchange transactions. AASB 1004 Contributions will continue to apply to non-exchange transactions.

Likely impact: The Commission is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the Commission’s preliminary assessment, it is expected to have a significant impact on the timing of the recognition of revenue.

AASB 9 Financial Instruments

1 July 2018 AASB 9 now incorporates:

- the classification and measurement requirements for financial assets and for financial liabilities, and the recognition and derecognition requirements for financial instruments; - requirements for impairment of financial assets; and - hedge accounting.

Likely impact: The Commission is yet to undertake a detailed assessment of the impact of AASB 9. However, based on the Commission’s preliminary assessment, it is expected to have a significant impact on the recognition and measurement of the Commission’s financial instruments.

1. The Commission’s expected initial application date is when the Commission’s reporting period. accounting standard becomes operative at the beginning of the

Part 04 / Financial statements 187

Australian Trade Commission Notes to and forming part of the financial statements All other new, revised or amending Standards or Interpretations that were issued prior to the sign-off date and are applicable to future reporting periods are not expected to have a future material impact on the Commission’s financial statements.

1.5 Revenue

Revenue from the sale of goods is recognised when:

a) the risks and rewards of ownership have been transferred to the buyer;

b) the Commission retains no managerial involvement or effective control over the goods;

c) the revenue and transaction costs incurred can be reliably measured; and

d) it is probable that the economic benefits associated with the transaction will flow to the Commission.

Revenue from the rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and

b) the probable economic benefits associated with the transaction will flow to the Commission.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the total estimated costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Revenue from Government

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the Commission gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

1.6 Gains

Resources Received Free of Charge

Resources received free of charge are recognised as gains when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another non-corporate or corporate Commonwealth entity as a consequence of a restructuring of administrative arrangements (refer to Note 1.7).

Sale of Assets

Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

1.7 Transactions with the Government as Owner

Equity Injections

Amounts appropriated which are designated as 'equity injections' for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Restructuring of Administrative Arrangements

Net assets received from or relinquished to another Government entity under a restructuring of administrative arrangements are adjusted at their book value directly against contributed equity.

188 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

1.8 Employee Benefits

Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits expected within twelve months of the end of the reporting period are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long term employee benefit liabilities are measured as the net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provisions for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Commission is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the Commission's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave is estimated using present value techniques, which take account of attrition rates and pay increases through promotion and inflation.

For employees engaged overseas, liabilities for separation entitlements are calculated in accordance with local employment conditions.

Separation and Redundancy

Provision is made for separation and redundancy benefit payments. The Commission recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

Australian based staff of the Commission are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the Public Sector Superannuation accumulation plan (PSSap), and a small number of other complying funds nominated by employees.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance's administered schedules and notes.

The Commission makes employer contributions to the employees' superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Commission accounts for the contributions as if they were contributions to defined contribution plans.

For employees engaged overseas, the Commission pays employer contributions to meet its superannuation obligations, which vary according to local employment conditions.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final pay period of the year and other amounts payable in relation to 2014-15.

Part 04 / Financial statements 189

Australian Trade Commission Notes to and forming part of the financial statements

1.9 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.

Operating lease payments are expensed on a straight-line basis which is representative of the pattern of benefits derived from the leased assets.

Security deposits in relation to overseas property leases are payable to the Commission on the termination of individual leases. These deposits are classified as current or non-current receivables as appropriate.

Lease incentives taking the form of payments from landlords, subsidised fitout, or rental holidays, are recognised as liabilities. These liabilities are reduced by allocating future lease payments between rental expense and reduction of the liability.

1.10 Fair Value Measurement

The Commission deems transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period, by re-assessing categorisation based on the lowest level input that is significant to the fair value measurement as a whole.

1.11 Cash

Cash is recognised at its nominal amount. Cash and cash equivalents includes cash on hand, cash at banks and deposits held at call with banks and includes cash in special accounts.

1.12 Financial Assets and Liabilities

Recognised Financial Assets and Liabilities

Financial assets and liabilities are measured at fair value. In practice this means that receivables are measured at their nominal amounts, less any allowance for impairment losses. Provisions are made when collection of the debt is judged to be less rather than more likely.

Trade creditors and accruals are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced) and measured at their nominal amounts, being the amounts at which they will be settled.

1.13 Contingent Liabilities and Contingent Assets

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

1.14 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor agency’s accounts immediately prior to the restructuring.

190 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

1.15 Property, Plant and Equipment

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $5,000 ($3,500 for computer equipment), which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located where there is a reasonable prospect that this will be required.

Revaluations

Fair values for each class of asset are determined as shown below:

Asset class Fair value measurement

Land and Buildings -Leasehold improvements Depreciated replacement cost

Property, plant and equipment -Plant and equipment Market selling price

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Commission using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future, reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2015 2014

Leasehold improvements Lease term or assessed life Lease term or assessed life

Property, plant and equipment 3 to 10 years 3 to 10 years

Impairment

All assets were assessed for impairment at 30 June 2015. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Commission were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Part 04 / Financial statements 191

Australian Trade Commission Notes to and forming part of the financial statements Restoration Provisions

Provisions for restoration represent restoration obligations in respect of information and communications technology equipment. The provisions are the best estimate of the present value of the expenditure required to settle the restoration obligations at reporting date, based on current security and legal requirements and technology. The amount of the provision for future restoration costs is capitalised as a Property, Plant and Equipment asset and amortised over the asset’s life.

1.16 Intangibles

The Commission's intangibles comprise internally developed and purchased software for internal use and other intellectual property. Other intellectual property comprises databases, still and moving images and website resources. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Intangible asset development projects in progress, where future economic benefits are assessed as probable, are recognised progressively as assets and measured at cost. Amortisation begins when the asset is first put into use or held ready for use.

Intangible assets are amortised on a straight-line basis over their anticipated useful life. The useful lives of the Commission's intangibles are 3 to 10 years (2013-14: 3 to 10 years).

All intangible assets were assessed for indications of impairment at 30 June 2015. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

1.17 Taxation/Competitive Neutrality

The Commission is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

The Commission also pays various in-country taxes applicable to its overseas operations.

Revenues, expenses and assets are recognised net of GST or equivalent except where the amount of GST or equivalent incurred is not recoverable from the Australian Taxation Office and except for receivables and payables.

Competitive Neutrality

The Commission has not been required to make any competitive neutrality payments.

1.18 Foreign Currency

Transactions denominated in a foreign currency are translated to Australian currency using the exchange rate at the date of the transaction. At reporting date, foreign currency receivables and payables or assets and liabilities are translated at the exchange rates current as at that date. All exchange gains and losses are recognised as revenues or expenses, as appropriate.

The Commission's operating budget funding for overseas activities is adjusted for any differences in realised foreign exchange transactions during the year against rates set at Budget by the Department of Finance. Adjustments are generally made to the Appropriation Bills in the current or following year. Any amounts so receivable or payable at the end of the reporting period are recognised as assets or liabilities as appropriate.

1.19 Compliance with Statutory Conditions for Payments from the Consolidated Revenue Fund

The Australian Government continues to have regard to developments in case law, including the High Court’s most recent decision on Commonwealth expenditure in Williams v Commonwealth [2014] HCA 23, as they contribute to the larger body of law relevant to the development of Commonwealth programs. In accordance with its general practice, the Government will continue to monitor and assess risk and decide on any appropriate actions to respond to risks of expenditure not being consistent with constitutional or other legal requirements.

192 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

1.19 Reporting of Administered Activities

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Administered Cash Transfers to and from the Official Public Account

Revenue collected by the Commission for use by the Government rather than the Commission is administered revenue.

Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the Commission on behalf of the Government and reported as such in the schedule of administered cash flows and in the administered reconciliation schedule.

Grants

The Commission, on behalf of the Government, administers grants relating to the Export Market Development Grants Scheme (EMDG) and Asian Business Engagement Plan (ABE).

Export Market Development Grants are brought to account when deemed payable in accordance with the provisions of the Export Market Development Grants Act 1997. However, a provision is also recognised at the end of the financial year for the likely payments arising from grants claims and appeals lodged but not yet finalised based on prior years' payment history.

ABE grant liabilities are recognised to the extent that (i) the services required to be performed by the grantee have been performed or (ii) the grant eligibility criteria have been satisfied, but payments due have not been made. A commitment is recorded when the Government enters into an agreement to make these grants but services have not been performed or criteria satisfied.

Part 04 / Financial statements 193

Australian Trade Commission Notes to and forming part of the financial statements

Note 2: Events After the Reporting Period

There was no subsequent event that had the potential to significantly affect the ongoing structure and financial activities of the Commission.

194 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 3: Net Cash Appropriation Arrangements

2015 2014

$'000 $'000

Total comprehensive income/(loss) less depreciation/amortisation expenses previously funded through revenue appropriations1 3,999 7,987

Plus: depreciation/amortisation expenses previously funded through revenue appropriation (19,203) (18,068)

Total comprehensive income/(loss) - as per the Statement of Comprehensive Income (15,204) (10,081)

1. From 2010-11, the Government introduced net cash appropriation arrangements, where revenue appropriations for depreciation/amortisation expenses ceased. Entities now receive a separate capital budget provided through equity appropriations. Capital budgets are to be appropriated in the period when cash payment for capital expenditure is required.

Note 4: Expenses

Note 4A: Employee Benefits Wages and salaries 92,958 89,191

Superannuation Defined contribution plans 3,911 3,709

Defined benefit plans 5,526 5,788

Leave and other entitlements 19,252 18,689

Separation and redundancies 1,762 3,735

Fringe benefits tax

Total employee benefits

Note 4B: Suppliers

5,885 129,294

3,529 124,641

Goods and services supplied or rendered Contractors, consultants and service providers 14,269 11,278

Non-lease property related costs 6,507 5,852

Publicity and promotions 7,783 8,134

Communications and information technology 4,733 4,915

Travel and related expenses 9,078 8,181

Tradestart payments 2,344 3,183

Other operating costs

Total goods and services supplied or rendered

Services rendered in connection with

8,394 53,108

9,216 50,759

Related parties 588 496

External parties

Total services rendered

52,520 53,108

50,263 50,759

Total goods and services supplied or rendered

Other suppliers

53,108 50,759

Operating lease rentals in connection with Related parties Minimum lease payments 3,830 4,044

External parties Minimum lease payments 17,244 16,104

Workers compensation expenses

Total other suppliers

Total suppliers

460

21,534

74,642

438

20,586

71,345

Part 04 / Financial statements 195

Australian Trade Commission Notes to and forming part of the financial statements

Note 5: Own-Source Income

Own-Source Revenue

2015 2014

$'000 $'000

Note 5A: Sale of Goods and Rendering of Services Rendering of services in connection with Related parties 10,881 11,846

External parties

Total rendering of services

Note 5B: Other Gains

12,032 22,913

9,129 20,975

Resources received free of charge

Remuneration of auditors1 160 160

Leasehold improvements - 166

Other

Total other gains

257

326

1. KPMG was engaged by the ANAO in 2014-15 to provide financial statement audit services to the Commission. KPMG provides other services to the Commission in the nature of consultancies and the provision of financial reporting tools and associated training and support. Fees for other services performed by KPMG were $0.100m in 2015 (2014: $0.017m), which are included in contractors, consultants and service providers at Note 4B.

196 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements Note 6: Fair Value Measurements The following tables provide an analysis of assets and liabilities that are measured at fair value. The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Commission can access at measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Note 6A: Fair Value Measurements, Valuation Techniques and Inputs Used

Fair value measurements at the For Levels 2 and 3 fair value measurements end of the reporting period Category Range

2015 2014 (Level

$'000 $'000 1, 2 or 3

Valuation technique(s)

Inputs used

(weighted average)

Sensitivity of the fair value measurement to changes in unobservable inputs

Non-financial assets

Leasehold improvements 13,382 14,346 Level 3 Depreciated Cost per square metre $502 - The significant unobservable inputs used in

replacement cost $28,617

($2,129)

the fair value measurement of the Commission’s leasehold improvements are costs per square metre of similar leasehold improvements in the relevant city or country.

Significant increases (decreases) of any of those inputs in isolation would result in a significantly higher (lower) fair value measurement.

Other property, plant and equipment

17,026 17,269 Level 2 Market approach Sale prices of N/A N/A

comparable assets

Other property, plant and equipment 4

1,058 1,795 Level 3 Depreciated Costs of producing or $0.000m - The significant unobservable inputs used in

replacement cost acquiring similar $0.153m the fair value measurement of the

assets with equivalent ($0.002m) Commission’s other property, plant and service capacity equipment are the costs of producing or

acquiring similar assets with equivalent service capacity. Significant increases (decreases) of any of those inputs in isolation would result in a significantly higher (lower)

fair value measurement.

Total non-financial assets

Total fair value measurements of

31,466 33,410

assets in the statement of financial position 31,466 33,410

Part 04 / Financial statements 197

Australian Trade Commission Notes to and forming part of the financial statements 1. No change in valuation technique occurred during the period. 2. Significant unobservable inputs only. Not applicable for assets or liabilities in the Level 2 category.

3. Comprises non-specialised IT assets, motor vehicles and furniture and fittings. 4. Comprises specialised IT assets. 5. Fair value measurements - highest and best use differs from current use for non-financial assets (NFAs) The highest and best use of all non-financial assets are the same as their current use.

6. Recurring and non-recurring Level 3 fair value measurements - valuation processes

For

leasehold improvements, the Commission procured valuation services from Colliers International (Colliers) and relied on valuation models provided by Colliers. The Commission analyses changes in fair value measurements at least once every 12 months. Colliers provided written assurance to the Commission that the model developed is in compliance with AASB 13.

For the majority of items of other property, plant and equipment measured at depreciated replacement cost, the Commission procured valuation services from Pickles Valuation Services (Pickles) in 2013 and relied on valuation models provided by Pickles. The remaining items of other property, plant and equipment are subject to management valuation using market based evidence. The Commission analyses changes in fair value measurements at least once every 12 months.

Recurring Level 3 fair value measurements - sensitivity analysis for financial assets and liabilities

The significant unobservable inputs used in the fair value measurement of the Commission’s leasehold improvements are costs per square metre of similar leasehold improvements in the relevant city or country. Significant increases (decreases) of any of those inputs in isolation would result in a significantly higher (lower) fair value measurement. The significant unobservable inputs used in the fair value measurement of the Commission’s other property, plant and equipment are the costs of producing or acquiring similar assets with equivalent service capacity. Significant increases (decreases) of any of those inputs in isolation would result in a significantly higher (lower) fair value measurement.

198 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 6B: Reconciliation for Recurring Level 3 Fair Value Measurements Recurring Level 3 fair value

measurements

-reconciliation for

assets

Non

- financial assets

Other property,

Leasehold

plant and plant and

improvements

equipment

Total

2015

2014

2015

2014

2015

2014

$'000

As at 1 July

14,346

11,180

1,795

3,075

16,141

14,255

Total gains/(losses) recognised in net cost of services

(4,025)

(3,489)

(737)

(1,147)

(4,762)

(4,636)

Total gains/(losses)

recognised in other comprehensive income

304

3,697

304

3,697

Purchases

2,770

2,959

2,770

2,959

Sales

(13)

(1)

(133)

(13)

(134)

Total as at 30 June

13,382

14,346

1,058

1,795

14,440

16,141

1. These gains/(losses) are presented in the Statement of Comprehensive Income under ‘Depreciation and amortisation’.

2. These gains/(losses) are presented in the Statement of Comprehensive Income under ‘Change in asset revaluation surplus’.

Part 04 / Financial statements 199

Australian Trade Commission Notes to and forming part of the financial statements

Note 7: Financial Assets

2015 2014

$'000 $'000

Note 7A: Trade and Other Receivables Good and services receivables in connection with Related parties 822 608

External parties

Total goods and services receivables

Appropriations receivables

3,225

4,047

2,319

2,927

Existing programs

Total appropriations receivable

Other receivables

42,848 42,848

39,570 39,570

GST receivable from the Australian Taxation Office 799 641

Total other receivables 799 641

Total trade and other receivables (gross)

Less impairment allowance

47,694 43,138

Goods and services 20 30

Total impairment allowance

Total trade and other receivables (net)

Trade and other receivables (net) expected to be recovered

47,674

43,108

No more than 12 months 46,753 42,301

More than 12 months 921 807

Total trade and other receivables (net)

Trade and other receivables (gross) aged as follows

47,674 43,108

Not overdue 46,995 42,991

Overdue by 0 to 30 days 290 83

31 to 60 days 84 16

61 to 90 days 162 10

More than 90 days

Total trade and other receivables (gross)

Impairment allowance aged as follows

163

47,694

43,138

Overdue by:

More than 90 days

Total impairment allowance

20 20

30 30

Credit terms for goods and services were within 30 days (2014: 30 days).

200 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 7A: Trade and Other Receivables (continued)

Reconciliation of the Impairment Allowance

Movements in relation to 2015

Goods and services Total

$'000 $'000

As at 1 July 2014 30 30

Amounts written off - -

Amounts recovered and reversed (23) (23)

Increase/(Decrease) recognised in net cost of services 13 13

Total as at 30 June 2015 20 20

Movements in relation to 2014

Goods and services Total

$'000 $'000

As at 1 July 2013 162 162

Amounts written off (145) (145)

Amounts recovered and reversed - -

Increase/(Decrease) recognised in net cost of services 13 13

Total as at 30 June 2014 30 30

Part 04 / Financial statements 201

Australian Trade Commission Notes to and forming part of the financial statements

Note 8: Non-Financial Assets

2015 2014

$'000 $'000

Note 8A: Land and Buildings Leasehold improvements Fair value 12,262 13,501

Leasehold improvements - work in progress - at cost 1,295 1,339

Accumulated impairment losses

Total leasehold improvements Total land and buildings

(175)

13,382 13,382

(494)

14,346 14,346

Impairment losses of $0.175m (2014: $0.494m) were recognised in other comprehensive income.

No land or buildings are expected to be sold or disposed of within the next 12 months, other than in the normal course of business operations.

Note 8B: Property Plant and Equipment Other property, plant and equipment

Fair value 27,367 20,696

Accumulated depreciation (12,127)

15,240

(6,307)

14,389

Property, plant and equipment - work in progress

Total other property, plant and equipment

Total property, plant and equipment

- at cost 2,844

18,084

4,675 19,064

19,064

No indicators of impairment were found for property, plant and equipment.

No property, plant or equipment is expected to be sold or disposed of within the next 12 months, other than in the normal course of business operations.

Revaluations of non-financial assets

All revaluations were conducted in accordance with revaluation policy stated at Note 1.

The 2015 revaluation of leasehold improvements was conducted by the independent qualified valuer Colliers International Pty Ltd. The revaluation increment for leasehold improvements was $0.479m (2014: $4.191m increment).

A management valuation of other property, plant and equipment was conducted at 30 June 2013. The revaluation increment for other property, plant and equipment was $0.987m in 2013. No revaluation was conducted at 30 June 2015.

All increments and decrements were transferred to the asset revaluation surplus by asset class and included in the equity section of the statement of financial position. No decrements were expensed (2014: no decrements).

202 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

2015 2014

Note 8C: Intangibles

$'000 $'000

Computer software Internally developed - in progress 2,995 4,579

Internally developed - in use 32,365 29,997

Purchased 22,447 20,134

Accumulated amortisation

Total computer software

Other intangibles1 Internally developed - in progress Internally developed - in use Purchased Accumulated amortisation

Total other intangibles Total intangibles

(43,784) 14,023

8,420 -

(712)

7,712 21,735

(35,350) 19,360

3,227 -(1)

3,226 22,586

1. Other intangibles comprise capital costs in connection with the Tourism International Visitor Survey and National Visitor Survey.

No indicators of impairment were found for intangible assets.

No intangibles are expected to be sold or disposed of within the next 12 months, other than in the normal course of business operations.

Part 04 / Financial statements 203

Australian Trade Commission Notes to and forming part of the financial statements

Note 8D: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles for 2015 Reconciliation of the opening and closing balances of property, plant and equipment for 2015

Buildings -leasehold improvements $’000

Other

property, plant & equipment $’000

Computer software internally developed

$’000

Computer software purchased $’000

Other

intangibles internally developed $’000

Total $’000

As at 1 July 2014 Gross book value 14,346 25,371 34,576 20,134 3,227 97,654

Accumulated depreciation and impairment - (6,307) (20,769) (14,581) (1) (41,658)

Total as at 1 July 2014 14,346 19,064 13,807 5,553 3,226 55,996

Additions Purchase or internally developed Revaluations and impairments recognised in other Depreciation and amortisation Disposals

Other Other movements

comprehensive income

2,770 304

(4,025)

(13) -

5,186 -

(5,969)

(197) -

784 -

(5,213)

2,396 -

(3,285)

(19) -

5,197 -(711)

16,333 304

(19,203)

(229) -

Total as at 30 June 2015 13,382 18,084 9,378 4,645 7,712 53,201

Total as at 30 June 2015 represented by Gross book value 13,382 30,211 35,360 22,447 8,424 109,824

Accumulated depreciation, amortisation and impairment

Total as at 30 June 2015

- (12,127) (25,982) (17,802) (712) (56,623)

13,382 18,084 9,378 4,645 7,712 53,201

204 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Reconciliation of the

opening and closing balances of property, plant and equipment for 2014

Buildings -leasehold improvements

$’000

Other property, plant & equipment

$’000

Computer software internally developed $’000

Computer software purchased

$’000

Other

intangibles internally developed

$’000

Total $’000

As at 1 July 2013 Gross book

value

11,180

21,898

32,167

15,296

80,541

Accumulated depreciation and impairment

(18,214)

(11,709)

(29,923)

Total as at 1 July 2013

11,180

21,898

13,953

3,587

50,618

Additions Purchase or internally developed Revaluations and impairments recognised in other Depreciation and amortisation Disposals Other

Other movements

comprehensive income

2,959 3,697 (3,489)

(1) -

3,925

(6,675) (252) 168

4,771

(4,917)

- -

5,122

(2,986)

(170)

3,227

(1)

- -

20,004 3,697 (18,068) (253)

(2)

Total as at 30 June 2014

14,346

19,064

13,807

5,553

3,226

55,996

Total as at 30 June 2014 represented by Gross book value

14,346

25,371

34,576

20,134

3,227

97,654

Accumulated

depreciation, amortisation and impairment

Total as at 30 June 2014

(6,307)

(20,769)

(14,581)

(1)

(41,658)

14,346

19,064

13,807

5,553

3,226

55,996

Part 04 / Financial statements 205

Australian Trade Commission Notes to and forming part of the financial statements

2015 2014

$'000 $'000

Note 8E: Other Non-Financial Assets Prepayments - property leases 5,354 5,695

Prepayments - other

Total other non-financial assets

2,415

7,769

2,218

7,913

Other non-financial assets expected to be recovered No more than 12 months

Total other non-financial assets

7,769 7,769

7,913 7,913

No indicators of impairment were found for other non-financial assets.

Note 9: Payables

Note 9A: Suppliers Trade creditors and accruals 10,996 12,163

GST payable to the Australian Taxation Office

Total suppliers

Suppliers expected to be settled

11,077

12,218

No more than 12 months 10,583 11,778

More than 12 months 494 440

Total suppliers

Suppliers in connection with

11,077 12,218

Related parties 720 407

External parties

Total suppliers

10,357

11,077

11,811

12,218

Settlement was usually made within 30 days.

Note 9B: Other Payables Wages and salaries 3,794 3,631

Lease incentives 269 172

Unearned revenue 2,172 1,359

Other

Total other payables

6,249

5,176

Other payables expected to be settled No more than 12 months 6,042 5,084

More than 12 months

Total other payables

207 6,249

5,176

206 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 10: Provisions

Note 10A: Employee Provisions Leave Separations and redundancies

Total employee provisions

Employee provisions expected to be settled No more than 12 months More than 12 months

2015 $'000

23,985 8,905 32,890

10,676 22,214

2014 $'000

23,007 10,351 33,358

12,612 20,746

Total employee provisions

Note 10B: Other Provisions Provision for onerous contracts Provision for restoration

32,890

727 668

33,358

1,558 784

Total other provisions

Other provisions expected to be settled No more than 12 months More than 12 months

1,395

1,148 247

2,342

1,519 823

Total other provisions 1,395 2,342

Provision for onerous contracts $’000

Provision for restoration $’000

Total $’000

As at 1 July 2014 Additional provisions Amounts used Amounts reversed

made

1,558 154 (797) (188)

784 158 (158) (116)

2,342 312 (955) (304)

Total as at 30 June 2015 727 668 1,395

The Commission currently has 88 (2014: 91) agreements for the leasing of premises which have provisions requiring the Commission to restore the premises to their original condition at the conclusion of the lease. The Commission has made a provision to reflect the estimated present value of this obligation where it is considered probable that the clauses in the leases will be enforced by landlords. It is the Commission’s experience that this only applies to a minority of leases.

Part 04 / Financial statements 207

Australian Trade Commission Notes to and forming part of the financial statements

Note 11: Restructuring

Note 11A: Departmental Restructuring

2014

Tourism Policy, Programs and Research:

Department of Industry1 $'000

FUNCTIONS ASSUMED Assets recognised Goods and services receivables Appropriations receivable

Other property, plant and equipment Other non-financial assets

1,215 73 194

Total assets recognised 1,492

Liabilities recognised Employee provisions Other payables

2,848 717

Total liabilities recognised 3,565

Net assets/(liabilities) recognised2,3 (2,073)

Income assumed Recognised by the receiving entity Recognised by the losing entity

2,271 2,701

Total income assumed 4,972

Expenses assumed Recognised by the receiving entity Recognised by the losing entity

8,490 8,939

Total expenses assumed 17,429

1. Responsibility for tourism policy, programs and research was assumed from the Department of Industry during 2013-14 due to an Administrative Arrangements Order made on 3 October 2013. 2. The net liabilities assumed from all entities were $2.073m.

3. In respect of functions assumed, the net book values of assets and liabilities were transferred to the Commission for no consideration.

208 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 12: Cash Flow Reconciliation

2015 2014

$'000 $'000

Reconciliation of cash and cash equivalents as per statement of financial position to cash flow statement

Cash and cash equivalents as per Cash flow statement 5,881 3,594

Statement of financial position 5,881 3,594

Discrepancy - -

Reconciliation of net cost of services to net cash from/(used by) operating activities Net (cost of)/contribution by services (197,991) (190,538)

Revenue from Government 182,483 176,760

Adjustments for non-cash items Depreciation/amortisation 19,203 18,068

Net write down of non-financial assets - 12

Loss on disposal of assets 49 43

Movements in assets and liabilities Assets (Increase)/Decrease in net receivables (2,005) 712

(Increase)/Decrease in prepayments 144 (543)

Liabilities Increase/(Decrease) in employee provisions and payables (468) (646)

Increase/(Decrease) in supplier payables 1,177 1,215

Increase/(Decrease) in other payables 1,073 95

Increase/(Decrease) in other provisions

Net cash from/(used by) operating activities

(947) (1,444)

2,718 3,734

Part 04 / Financial statements 209

Australian Trade Commission Notes to and forming part of the financial statements

Note 13: Contingent Assets and Liabilities

Claims for damages or costs Total

2015 2014 2015 2014

$'000 $'000 $'000 $'000

Contingent liabilities Balance from previous period 64 127 64 127

New contingent liabilities recognised - 64 - 64

Re-measurement - - - -

Liabilities realised (20) - (20) -

Obligations expired (44) (127) (44) (127)

Total contingent liabilities - 64 - 64

Quantifiable Contingencies The above table contains nil contingent liabilities disclosure in 2015 (2014: $0.064m). The 2014 amount represented an estimate of the Commission’s liability based on precedent in such cases. The Commission was defending the claims at 30 June 2014.

Significant Remote Contingencies The Commission has provided bank guarantees for a total of $0.538m (2014: $0.536m) in relation to property leases. These were not included in the above table.

210 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 14: Senior Management Personnel Remuneration

2015 2014

$ $

Short-term employee benefits Salary 12,220,379 11,498,447

Other allowances 1,288,504 1,124,055

Total short-term employee benefits 13,508,883 12,622,502

Post-employment benefits Superannuation

Total post-employment benefits

Other long-term benefits

1,998,634 1,998,634

2,041,121 2,041,121

Annual leave 1,060,422 1,043,086

Long-service leave

Total other long-term employee benefits

Termination benefits

Total senior management personnel remuneration expenses

347,339 1,407,761

81,973

16,997,251

442,789 1,485,875

514,878

16,664,376

The total number of senior management personnel that are included in the above table are 69 individuals (2014: 65 individuals).

Part 04 / Financial statements 211

Australian Trade Commission Notes to and forming part of the financial statements

Note 15: Financial Instruments

Note 15A: Fair Value of Financial Instruments

Carrying Fair Carrying Fair

amount value amount value

2015 2015 2014 2014

$'000 $'000 $'000 $'000

Financial Assets Cash and cash equivalents 5,881 5,881 3,594 3,594

Receivables for goods and services 4,027 4,027 2,897 2,897

Total financial assets 9,908 9,908 6,491 6,491

Financial Liabilities Trade creditors 10,996 10,996 12,163 12,163

Other payables 6,249 6,249 5,176 5,176

Total financial liabilities 17,245 17,245 17,339 17,339

212 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 15B: Credit Risk

The Commission's senior management has endorsed policies and procedures for debt management (including the provision of credit terms) to minimise the incidence of credit risk.

The Commission has no significant exposures to any concentrations of credit risk.

The Commission's maximum exposures to credit risk at reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated at Note 15A.

Credit quality of financial assets not past due or individually determined as impaired Not past due Not past due Past due or Past due or

nor impaired nor impaired impaired impaired

2015 2014 2015 2014

$'000 $'000 $'000 $'000

Cash and cash equivalents 5,881 3,594 - -

Receivables for goods and services 3,348 2,780 699 147

Total 9,229 6,374 699 147

Ageing of financial assets that were past due but not impaired in 2015 0 to 30 31 to 60 61 to 90 90+

days days days days Total

$'000 $'000 $'000 $'000 $'000

Receivables for goods and services 290 84 162 143 679

Total 290 84 162 143 679

Ageing of financial assets that were past due but not impaired in 2014 0 to 30 31 to 60 61 to 90 90+

days days days days Total

$'000 $'000 $'000 $'000 $'000

Receivables for goods and services 83 16 10 8 117

Total 83 16 10 8 117

Part 04 / Financial statements 213

Australian Trade Commission Notes to and forming part of the financial statements

Note 15C: Liquidity Risk

The Commission undertakes cash forecasting to ensure it can meet its financial liabilities as they fall due.

Maturities for non-derivative financial liabilities in 2015 On within 1 between 1 between 2 more than

demand $'000

year $'000

to 2 years $'000

to 5 years $'000

5 years $'000

Total $'000

Trade creditors 10,996 - - - - 10,996

Other payables 5,980 62 55 47 105 6,249

Total 16,976 62 55 47 105 17,245

Maturities for non-derivative financial liabilities 2014 On within 1 between 1 between 2 more than

demand $'000

year $'000

to 2 years $'000

to 5 years $'000

5 years $'000

Total $'000

Trade creditors 12,163 - - - - 12,163

Other payables 5,004 80 47 35 10 5,176

Total 17,167 80 47 35 10 17,339

The Commission had no derivative financial liabilities in either 2015 or 2014.

214 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 15D: Market Risk

Currency risk Currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Commission is exposed to foreign exchange currency risk primarily through undertaking certain transactions denominated in foreign currency. The Commission is exposed to foreign exchange risk for many currencies.

The following table details the effect on the net cost of services and equity as at 30 June from a 10.9% favourable/unfavourable change in the Australian dollar against all currencies with all other variables held constant.

Sensitivity analysis of the risk that the Commission is exposed to for 2015

Change in

Effect on

Net cost of

Risk risk variable services Equity

variable % $'000 $'000

Exposed

Currency risk currencies + 10.9 526 526

Exposed

Currency risk currencies - 10.9 (526) (526)

Sensitivity analysis of the risk that the Commission is exposed to for 2014

Change in

Effect on

Net cost of

Risk risk variable services Equity

variable % $'000 $'000

Exposed

Currency risk currencies 11.5 654 654

Exposed

Currency risk currencies (11.5) (654) (654)

The above amounts relate to the unrealised foreign exchange movements. Realised movements in foreign exchange are covered by adjustments to the Commission's appropriations.

The method used to arrive at the possible risk of 10.9% was based on both statistical and non-statistical analyses. The statistical analysis has been based on main currencies’ movements for the last five years. This information is then revised and adjusted for reasonableness under the current economic circumstances. The five main currencies the Commission has exposure to are US dollars, Euros, Chinese Renminbi, Japanese Yen and Indian Rupees.

Interest rate risk The Commission has no material exposure to interest rate risk.

Other price risk The Commission has no material exposure to other price risk.

Part 04 / Financial statements 215

Australian Trade Commission Notes to and forming part of the financial statements

Note 16: Financial Assets Reconciliation

2015 2014

$'000 $'000

Total financial assets as per statement of financial position 53,555 46,702

Less: Non-financial instrument components Appropriations receivable (42,848) (39,570)

Other receivables

Total non-financial instrument components Total financial assets as per financial instruments note

(799)

(43,647) 9,908

(641)

(40,211) 6,491

216 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 17: Administered Expenses

2015 2014

$'000 $'000

Note 17A: Employee Benefits Wages and salaries 4,575 4,502

Superannuation

Defined contribution plans 201 190

Defined benefit plans 421 673

Fringe benefits tax 7 20

Other employee expenses 30 34

Total employee benefits 5,234 5,419

Note 17B: Suppliers Goods and services supplied or rendered Operating expenses 1,113 672

Total goods and services supplied or rendered 1,113 672

Services rendered in connection with External parties 1,113 672

Total services rendered 1,113 672

Total goods and services supplied or rendered 1,113 672

Other suppliers Operating lease rentals in connection with External parties Minimum lease payments 434 579

Total other suppliers 434 579

Total suppliers 1,547 1,251

Note 17C: Grants Private sector Export Market Development Grants 137,840 116,178

Asian Business Engagement Plan Grants

Total grants

1,380 139,220

1,759 117,937

Part 04 / Financial statements 217

Australian Trade Commission Notes to and forming part of the financial statements

Note 18: Administered Financial Assets

2015 2014

$'000 $'000

Note 18A: Trade and Other Receivables

Other receivables Other 106 96

GST receivable from the Australian Taxation Office 19 7

103

Total other receivables 125

Total trade and other receivables (gross)

Less impairment allowance

125

Other

Total impairment allowance Total trade and other receivables (net)

Trade and other receivables (net) expected to be recovered

(84) (84)

(84) 19

(84) 41

No more than 12 months 36 13

More than 12 months 5 6

19 Total trade and other receivables (net)

Trade and other receivables (gross) aged as follows

Not overdue 36 7

Overdue by More than 90 days

Total trade and other receivables (gross)

Impairment allowance aged as follows

89 96

103 125

Not overdue - -

Overdue by More than 90 days

Total impairment allowance

Other receivables are with entities external to the Australian Government. Credit terms were

84 84

days).

within 30 days (2014: 30

218 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 18: Administered Financial Assets (continued)

Reconciliation of the Impairment Allowance

Movements in relation to 2015

Other

receivables Total

$'000 $'000

As at 1 July 2014 84 84

Amounts recovered and reversed - -

Total as at 30 June 2015 84 84

Movements in relation to 2014

Other

receivables Total

$'000 $'000

As at 1 July 2013 85 85

Amounts recovered and reversed (1) (1)

Total as at 30 June 2014 84 84

Part 04 / Financial statements 219

Australian Trade Commission Notes to and forming part of the financial statements

Note 19: Administered Payables

2015 2014

$'000 $'000

Note 19A: Suppliers Trade creditors and accruals 52 39

Other creditors - 5

Total suppliers

Suppliers expected to be settled

52 44

No more than 12 months 43 32

More than 12 months 9 12

Total suppliers

Suppliers in connection with

52 44

External parties

Total suppliers

Note 19B: Grants

Private sector:

ABE Plan grants payable

Total grants

Grants expected to be settled

635

473

No more than 12 months 635 473

Total grants

Note 19C: Other Payables

635 473

Salaries and wages

Total other payables

Other payables are expected to be settled

153 153

179 179

No more than 12 months

Total other payables

153 153

179 179

220 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 20: Administered Provisions

Note 20A: Employee Provisions Leave

2015

$'000

1,882

2014

$'000

1,709

Total employee provisions

Employee provisions are expected to be settled No more than 12 months More than 12 months

1,882

674 1,208

1,709

603 1,106

Total employee provisions

Note 20B: Grants Provisions Provision for EMDG grants

Total grants provisions

Grant provisions expected to be settled No more than 12 months

1,882

6,066

1,709

8,996

Total grants provisions 6,066 8,996

Provision for grants

$’000

Total

$’000

As at 1 July 2014 Additional provisions Amounts used made

8,996

5,211 (8,141)

8,996

5,211 (8,141)

Total as at 30 June 2015 6,066 6,066

Part 04 / Financial statements 221

Australian Trade Commission Notes to and forming part of the financial statements

Note 21: Administered Cash Flow Reconciliation

2015 2014

$'000 $'000

Reconciliation of cash and cash equivalents as per administered schedule of assets and liabilities to administered cash flow statement

Cash and cash equivalents as per Schedule of administered cash flows - -

Schedule of administered assets and liabilities - -

Discrepancy

Reconciliation of net cost of services to net cash from/(used) operating activities

- -

Net (cost of)/contribution by services (145,731) (124,235)

Movement in assets and liabilities

Assets (Increase)/Decrease in net receivables (22) 25

Liabilities Increase/(Decrease) in employee provisions 173 (622)

Increase/(Decrease) in supplier payables 8 (35)

Increase/(Decrease) in grants payable 162 473

Increase/(Decrease) in other payables (26) 19

Increase/(Decrease) in grants provisions

Net cash from/(used by) operating activities

(2,930) 2,558

(148,366) (121,817)

222 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 22: Administered Contingent Assets and Liabilities

Claims for damages or costs

2015 2014

$'000 $'000

Contingent liabilities Balance from previous period 883 2,558

New contingent liabilities recognised 1,755 2,132

Re-measurement 290 19

Liabilities realised (757) (1,796)

Obligations expired (937) (2,030)

Total contingent liabilities 1,234 883

Net contingent assets/(liabilities) 1,234 883

Quantifiable Administered Contingencies The above table contains $1.234m of contingent liabilities in respect to claims for damages or costs (2014: $0.883m). The amount represents an estimate of the Commission’s liability based on outstanding grants appeals.

Significant Remote Administered Contingencies The Commission had no significant remote administered contingencies.

Note 23: Administered Financial Instruments

Note 23A: Fair Value of Financial Instruments

Carrying Fair Carrying Fair

amount value amount value

2015 2015 2014 2014

$'000 $'000 $'000 $'000

Financial Assets Cash - - - -

Receivables 22 22 12 12

Total financial assets 22 22 12 12

Financial Liabilities Supplier and other payables 205 205 223 223

Grants payable and provisions 6,701 6,701 9,469 9,469

Total financial liabilities 6,906 6,906 9,692 9,692

There is no significant exposure to credit, liquidity or market risk.

Part 04 / Financial statements 223

Australian Trade Commission Notes to and forming part of the financial statements

Note 24: Administered Financial Assets Reconciliation

2015 2014

$'000 $'000

Total financial assets as per schedule of administered assets and liabilities 41 19

Less: Non-financial instrument components Other receivables

Total non-financial instrument components Total financial assets as per administered financial instruments note

(19) (7)

22 12

224 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements Note 25: Appropriations Note 25A: Annual Appropriations ('Recoverable GST exclusive') Annual Appropriations for

2015

Appropriation Act

PGPA Act

Appropriation applied in 2015

Annual

Appropriation

AFM

Section 74

Section

Total

appropriation

(current and prior years)

Variance

Section 51

determinations

$'000

Departmental Ordinary annual services

189,492

25,998

215,490

204,866

10,624

Other services Equity

1,500

505

995

(995)

Total

departmental

190,992

25,998

216,990

205,371

11,619

(995)

Administered items Ordinary annual services

Administered items

139,400

148,626

(9,226)

Total administered

139,400

148,626

(9,226)

1. In 2014-15, there were no appropriations that have been quarantined. 2. In 2014-15, there was no adjustment that met the recognition criteria of a formal addition or reduction in revenue (in accordance with FRR Part 6 Div 3) but at law the appropriations had not bee amended before the end of the reporting period. 3. In 2014-15, the Departmental variance of $10.6m was mainly attributed to supplementation received for cash payments made in prior years or to be made in subsequent years. Th

e Administered

variance of $9.2m was mainly attributed to cash payments for grants made from prior year appropriations. 4. On 26 June 2015, a determination was issued to reduce departmental equity appropriations following the Finance Minister’s approval of a movement of funds request by the Minister. The amount of the reduction under Appropriation Act (No. 2) was $994,980.

Part 04 / Financial statements 225

Australian Trade Commission Notes to and forming part of the financial statements

Note 25A: Annual Appropriations ('Recoverable GST exclusive') (continued) Annual

Appropriations for 2014

Appropriation

Act

FMA

Act

Appropriation applied in 2014

Annual

Appropriation

Appropriations

reduced

1,3

AFM

Section 30

Section 31

Section 32

Total

appropriation

(current and prior years)

Variance

$'000

Departmental Ordinary annual

services

172,007

24,820

196,827

197,651

(824)

Other services Equity

Total

departmental

172,007

24,820

196,827

197,651

(824)

Administered items Ordinary annual services

Administered items

141,740

(14,539)

393

127,594

122,210

5,384

Total

administered

141,740

(14,539)

393

127,594

122,210

5,384

1. Appropriations reduced under Appropriation Acts (No. 1, 3, 5) 2013-14: sections 10, 11, and 12 under Appropriation Acts (No. 2, 4, 6) 2013-14: sections 12, 13, and 14. Departmental appropriations do not lapse at financial year-end. However, the responsible Minister may decide that part or all of a departmental appropriation is not required and request that the Finance Minister reduce that appropriation. The reduction in the appropriation is effected by the Finance Minister's determination and is disallowable by Parliament. As with departmental appropriations, the responsible Minister may decide that part or all of an administered appropriation is not required and request that the Finance Minister reduce that appropriation. For administered appropriations reduced under section 11 of Appropriation Acts (Nos. 1, 3, 5) 2013-14 and section 12 of Appropriation Acts (Nos. 2, 4, 6) 2013-14, the appropriation is taken to be reduced to the required amount specified in Table D of this note in the 2013-14 financial statements once the annual report is tabled in Parliament. All administered appropriations may be adjusted by a Finance Minister’s determination, which is disallowable by Parliament. 2. Advance to the Finance Minister (AFM) - Appropriation Acts (Nos. 1, 3, 5) 2013-14: section 13 and Appropriation Acts (Nos. 2, 4, 6) 2013-14: section 15. 3. In 2013-14, there was no adjustment that met the recognition criteria of a formal addition or reduction in revenue (in accordance with FMO Div 101). 4. In 2013-14, the Administered variance of $5.4m was mainly attributed to lower demand for EMDG grants than budgeted.

226 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 25B: Departmental and Administered Capital Budgets ('Recoverable GST exclusive')

Capital Budget Appropriations applied in 2015

2015 Capital Budget Appropriations (current and prior years)

Appropriation Act PGPA Act

Total Capital Payments for

Annual Capital Budget non-financial Payments for Total

Budget Section 75 Appropriations assets

other purposes payments Variance

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Departmental Ordinary annual services - Departmental Capital Budget

17,287 - 17,287 18,146 - 18,146 (859)

Administered Ordinary annual services - Administered

Capital Budget

- - - - - - -

Part 04 / Financial statements 227

Australian Trade Commission Notes to and forming part of the financial statements

Note 25B: Departmental and Administered Capital Budgets ('Recoverable GST exclusive') (continued)

Capital Budget Appropriations applied in 2014

2014 Capital Budget Appropriations

(current

and prior years)

Appropriation Act

FMA Act

Total Capital Payments for Payments

Annual Capital Appropriations Budget non-financial for other Total

Budget

reduced

Section 32

Appropriations

assets

purposes

payments

Variance

$'000

Departmental Ordinary annual services

-Departmental

Capital Budget

11,020

23,752

(12,732)

Administered Ordinary annual services

-Administered

Capital Budget

1. Departmental and Administered Capital Budgets are appropriated through Appropriation Acts (No. 1, 3, 5). They form part of ordinary annual services and are not separately identified in the Appropriation Acts. For more information on ordinary annual services appropriation, please see Note 25A: Annual Appropriations. 2. Appropriations reduced under Appropriation Acts (No. 1, 3, 5) 2013-14: sections 10, 11, 12 and 15 or via a determination by the Finance Minister. 3. Payments made for non-financial assets include purchase of assets, expenditure on assets which has been capitalised, costs incurred to make good an asset to its original condition, and the capital repayment component of finance leases. 4. In 2013-14, the Departmental variance of $12.7m was mainly attributed to cash payments for non-financial assets made from prior year capital budget appropriations.

228 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 25C: Unspent Annual Appropriations ('Recoverable GST exclusive')

2015 2014

$'000 $'000

Departmental Appropriation Act (No. 1) 2013-14 Appropriation Act (No. 1) 2013-14 Appropriation Act (No. 3) 2013-14 Appropriation Act (No. 5) 2013-14 Appropriation Act (No. 1) 2014-15 Appropriation Act (No. 1) 2014-15 Appropriation Act (No. 3) 2014-15 Appropriation Act (No. 3) 2014-15 Appropriation Act (No. 5) 2014-15

- Capital Budget (DCB)

7,881 -

12,239 626 4,717 4,021 6,592 3,000

420

16,767 4,460 12,454 626

Total departmental 39,496 34,307

Administered Appropriation Appropriation Appropriation Appropriation

Act (No. 1) 2012-13 Act (No. 1) 2013-14 Act (No. 3) 2013-14 Act (No. 1) 2014-15

1,777

2,300 8,535 14,840 -

Total administered 1,777 25,675

Part 04 / Financial statements 229

Australian Trade Commission Notes to and forming part of the financial statements

Note 26: Special Accounts

Administered Payments and Services for Other Entities Receipts for Other Entities1 and Trust Moneys2 2015 2014 2015 2014

$'000 $'000 $'000 $'000

Balance brought forward from previous period 100 100 947 -

Increases Other receipts 10,217 10,224 696 1,233

Total increases 10,217 10,224 696 1,233

Available for payments 10,317 10,324 1,643 1,233

Decreases Departmental Payments made - - (620) (286)

Total departmental - - (620) (286)

Administered Payments made (10,217) (10,224) - -

Balance returned to the Official Public Account - - - -

Total administered (10,217) (10,224) - -

Total decreases (10,217) (10,224) (620) (286)

Total balance carried to the next period 100 100 1,023 947

1. Appropriation: Public Governance, Performance and Accountability Act 2013 section 80.

Establishing Instrument: Financial Management and Accountability Determination 2006/15.

Purpose: To make payments overseas on behalf of other entities, and to make payments to other entities for amounts received overseas on their behalf.

Date of ceasing (sunsetting): 1 October 2016

2. Appropriation: Public Governance, Performance and Accountability Act 2013 section 80.

Establishing Instrument: Financial Management and Accountability Determination 2008/05.

Purpose: To disburse amounts temporarily held on trust, and to disburse amounts in connection with services performed on behalf of other entities.

Date of ceasing (sunsetting): 1 October 2018

Note 27: Assets Held in Trust

The Commission had no assets held in trust in both the current and prior reporting periods.

230 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements Note 28: Reporting of Outcomes As the Commission is a services organisation its outputs are directly related to the time its service staff spend on the provision of services. Business Unit Managers complete an annual survey of time spent on outputs which is then crossed with the cost of operating the Business Units to arrive at costs directly attributable to each output. These costs are converted to percentages which are then used as drivers to allocate full costs (that is all direct and indirect costs) to each output. The basis of attribution in the table below is consistent with the basis used for the Budget. Note 28A: Net Cost of Outcome Delivery

Outcome 1 Outcome 2 Total

2015 2014 2015 2014 2015 2014

$'000 $'000 $'000 $'000 $'000 $'000

Departmental

Expenses 211,089 201,911 13,187 12,864 224,276 214,775

Own-source income (24,740) (22,785) (1,545) (1,452) (26,285) (24,237)

Administered

Expenses 146,001 124,607 - - 146,001 124,607

Income (270) (372) - - (270) (372)

Net cost of outcome delivery 332,080 303,361 11,642 11,412 343,722 314,773

Part 04 / Financial statements 231

Australian Trade Commission Notes to and forming part of the financial statements

Note 28B: Major Classes of Departmental Expenses, Income, Assets and Liabilities by Outcome

Outcome 1

2015 $'000

2014 $'000

Outcome 2

2015 $'000

2014 $'000

Total

2015 $'000

2014 $'000

Expenses Employee benefits Suppliers Depreciation and amortisation Write-down and impairment of assets Losses from asset sales Foreign exchange losses

121,692 70,253 18,074 -

1,024

117,176 67,072 16,986 11

40 626

7,602 4,389 1,129 -

7,465 4,273 1,082 1

129,294 74,642 19,203 -

1,088

124,641 71,345 18,068 12

43 666

Total expenses 211,089 201,911 13,187 12,864 224,276 214,775

Own-source income Revenue from government Sale of goods and rendering of services Rental income Other revenue Other gains

171,753 21,566 71 2,861

242

166,174 19,719 80 2,680

306

10,730 1,347 4 179

10,586 1,256 5 171

182,483 22,913 75 3,040

257

176,760 20,975 85 2,851

326

Total own-source income 196,493 188,959 12,275 12,038 208,768 200,997

Assets Cash and cash equivalents Trade and other receivables Land and buildings Property, plant and equipment Intangibles Other non-financial assets

5,535 44,871 12,595 17,021 20,457

7,312

3,379 40,526 13,487 17,922 21,233

7,439

346 2,803 787 1,063 1,278

457

215 2,582 859 1,142 1,353

474

5,881 47,674 13,382 18,084 21,735

7,769

3,594 43,108 14,346 19,064 22,586

7,913

Total assets 107,791 103,986 6,734 6,625 114,525 110,611

Liabilities Suppliers Other payables Employee provisions Other provisions

10,426 5,882 30,956 1,313

11,486 4,866 31,360 2,202

651 367 1,934 82

732 310 1,998 140

11,077 6,249 32,890 1,395

12,218 5,176 33,358 2,342

Total liabilities 48,577 49,914 3,034 3,180 51,611 53,094

1. Outcomes 1 and 2 are described in Note 1.1. Net costs shown include intra-government costs that are eliminated in calculating the actual Budget outcome. Refer to Outcome 1 Resourcing Table and Outcome 2 Resourcing Table of this Annual Report.

232 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 28C: Major Classes of Administered Expenses, Income, Assets, and Liabilities by Outcome

Outcome 1

Outcome 2

Total

2015 2014 2015 2014 2015 2014

$'000 $'000 $'000 $'000 $'000 $'000

Expenses Employee benefits Suppliers Grants

5,234 1,547 139,220

5,419 -

1,251 -

117,937 -

- 5,234

- 1,547

- 139,220

5,419 1,251 117,937

Total expenses 146,001 124,607 - - 146,001 124,607

Income Other revenue 270 372 - - 270 372

Total income 270 372 - - 270 372

Assets Cash and cash equivalents Trade and other receivables

- -

19 -

- -

- 41

Total assets 41 19 - - 41 19

Liabilities Suppliers Grants

52 635

44 -

473 -

- 52

- 635

44 473

Other payables Employee provisions Grants provisions

153 1,882 6,066

179 -

1,709 -

8,996 -

- 153

- 1,882

- 6,066

179 1,709 8,996

Total liabilities 8,788 11,401 - - 8,788 11,401

Part 04 / Financial statements 233

Australian Trade Commission Notes to and forming part of the financial statements

Note 29: Budgetary Reports and Explanations of Major Variances

The following tables provide a comparison of the original budget as presented in the 2014-15 Portfolio Budget Statements (PBS) to the 2014-15 final outcome as presented in accordance with Australian Accounting Standards for the Commission. The Budget is not audited.

Variances are considered to be ‘major’ based on the following criteria:

ï· the variance between budget and actual is greater than 10%; and ï· the variance between budget and actual is greater than 2% of total expenses; or ï· the variance between budget and actual is below this threshold but is considered important for the reader’s understanding or is relevant to an assessment of the discharge of accountability and to an analysis of performance of the Commission.

In some instances, a budget has not been provided for in the PBS, for example non-cash items such as asset revaluations, foreign exchange and sale of asset adjustments. Unless the variance is considered to be ‘major’ no explanation has been provided.

234 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 29A: Departmental Budgetary Reports

Statement of Comprehensive Income for the period ended 30 June 2015

Actual Budget estimate

Original1 Variance2

2015 2015 2015

$'000 $'000 $'000

NET COST OF SERVICES Expenses Employee benefits 129,294 119,040 10,254

Suppliers 74,642 83,440 (8,798)

Depreciation and amortisation 19,203 17,500 1,703

Write-down and impairment of assets - - -

Losses from asset sales 49 (250) 299

Foreign exchange losses 1,088 - 1,088

Total expenses 224,276 219,730 4,546

Own-Source Income Own-source revenue Sale of goods and rendering of services 22,913 17,592 5,321

Rental income 75 500 (425)

Other revenue 3,040 1,500 1,540

Total own-source revenue 26,028 19,592 6,436

Gains Other gains 257 158 99

Total gains 257 158 99

Total own-source income 26,285 19,750 6,535

Net cost of services 197,991 199,980 (1,989)

Revenue from Government 182,483 182,480 3

Deficit attributable to the Australian Government (15,508) (17,500) 1,992

OTHER COMPREHENSIVE INCOME Items not subject to subsequent reclassification to net cost of services Change in asset revaluation surplus 304 - 304

Total other comprehensive income/(loss) 304 - 304

Total comprehensive income/(loss) attributable to the Australian Government (15,204) (17,500) 2,296

1. The Commission's original budgeted financial statement that was first presented to parliament in respect of the reporting period (i.e. from the Commission's 2014-15 Portfolio Budget Statements (PBS)). 2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided further below.

Part 04 / Financial statements 235

Australian Trade Commission Notes to and forming part of the financial statements

Statement of Financial Position as at 30 June 2015

Actual Budget estimate

2015

Original1 Variance2

2015 2015

$'000 $'000 $'000

ASSETS Financial assets Cash and cash equivalents 5,881 5,500 381

Trade and other receivables 47,674 53,729 (6,055)

59,229 (5,674) Total financial assets 53,555

Non-financial assets Land and buildings 13,382 11,780 1,602

Property, plant and equipment 18,084 22,084 (4,000)

Intangibles 21,735 17,075 4,660

Other non-financial assets 7,769 7,176 593

58,115 2,855

117,344 (2,819)

Total non-financial assets 60,970

Total assets 114,525

LIABILITIES Payables Suppliers 11,077 14,808 (3,731)

Other payables 6,249 4,382 1,867

19,190 (1,864) Total payables 17,326

Provisions Employee provisions 32,890 35,378 (2,488)

Other provisions 1,395 3,786 (2,391)

39,164 (4,879)

58,354 (6,743)

58,990 3,924

Total provisions 34,285

Total liabilities 51,611

Net assets 62,914

EQUITY Contributed equity 87,302 89,379 (2,077)

Reserves 66,319 66,318 1

Retained surplus/(Accumulated deficit)

Total equity

(90,707)

62,914

(96,707) 6,000

58,990 3,924

236 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements Statement of for the period 2015

Changes in

Equity

ended 30 June

Retained earnings

Actual

Budget estimate Original

Variance

Asset revaluation surplus Actual

Budget estimate Original

Variance

General reserve

Actual

Budget estimate Original

Variance

Contributed equity/capital Actual

Budget estimate Original

Variance

Total equity

Actual

Budget estimate Original

Variance

2015

$'000

2015

$'000

2015

$'000

2015

$'000

2015

$'000

Opening balance Balance carried forward previous period

from

(75,199)

(79,207)

4,008

27,290

25,093

2,197

38,725

-66,701

73,592

(6,891)

57,517

58,203

(686)

Adjusted

opening balance

(75,199)

(79,207)

4,008

27,290

25,093

2,197

38,725

-66,701

73,592

(6,891)

57,517

58,203

(686)

Comprehensive income Surplus/(Deficit) for the period Other comprehensive income

(15,508)

(17,500)

1,992

304

2,500

(2,196)

(15,508)

304

(17,500) 2,500

1,992 (2,196)

Total

comprehensive income

(15,508)

(17,500)

1,992

304

2,500

(2,196)

-(15,204)

(15,000)

(204)

Transactions with owners Distributions to owners Returns of capital Restructuring Contributions by owners Equity injection Departmental capital budget

- - - -

3,314

-17,287

- -

1,500 14,287

- -

1,814 3,000

- -

3,314 17,287

- -

1,500 14,287

- -

1,814 3,000

Total

transactions with

owners

-20,601

15,787

4,814

20,601

15,787

4,814

Closing balance June

as at

(90,707)

(96,707)

6,000

27,594

27,593

38,725

-87,302

89,379

(2,077)

62,914

58,990

3,924

Part 04 / Financial statements 237

Australian Trade Commission Notes to and forming part of the financial statements

Cash Flow Statement for the period ended 30 June 2015

Actual Budget estimate

2015

Original1 Variance2

2015 2015

$'000 $'000 $'000

OPERATING ACTIVITIES Cash received Appropriations 181,766 182,480 (714)

Sales of goods and rendering services 23,037 18,092 4,945

Net GST received 3,731 5,714 (1,983)

Other 2,781 1,500 1,281

Total cash received 211,315 207,786 3,529

Cash used Employees 129,599 119,040 10,559

Suppliers 78,998 88,996 (9,998)

Total cash used 208,597 208,036 561

Net cash from/(used by) operating activities 2,718 (250) 2,968

INVESTING ACTIVITIES Cash received Proceeds from sales of property, plant and equipment 180 250 (70)

Total cash received 180 250 (70)

Cash used Purchase of property, plant and equipment 18,651 15,787 2,864

Total cash used 18,651 15,787 2,864

Net cash from/(used by) investing activities (18,471) (15,537) (2,934)

FINANCING ACTIVITIES Cash received Contributed equity 18,040 15,787 2,253

Total cash received 18,040 15,787 2,253

Net cash from/(used by) financing activities 18,040 15,787 2,253

Net increase/(decrease) in cash held 2,287 - 2,287

Cash and cash equivalents at the beginning of the reporting period

Cash and cash equivalents at the end of the reporting period 3,594 5,881 5,500 (1,906)

5,500 381

238 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 29B: Departmental Major Budget Variances for 2015

Explanations of major variances Affected line items (and statement)

Suppliers/Intangibles The variation of supplier expenditure with the original Supplier expenses (Statement of Comprehensive Income), budget mainly relates to the classification of Tourism Operating cash used - suppliers (Cash Flow Statement), research costs as an intangible asset, whereas the budget Intangibles(Statement of Financial Position) anticipated inclusion of these costs within supplier expenses. Formal consideration of this accounting treatment occurred after the budget had been prepared and therefore this change was not reflected in the original budget.

Employees/Suppliers In addition to the above, the allocation of operating budget Employee benefits expense (Statement of Comprehensive between employee and supplier expenditure varies from the Income), Operating cash used - employees (Cash Flow original budget because funding has been redirected from Statement), Supplier expenses (Statement of Comprehensive supplier to employee expenditure to maintain the Income), Operating cash used - suppliers (Cash Flow Commission's personnel resourcing requirements. Statement)

Sales of goods and rendering of services Total revenue from sales of goods and rendering of services Sale of goods and rendering of services revenue (Statement was greater than original budget, mainly due to $3.6m in of Comprehensive Income), Operating cash received - sale revenue received from Tourism research activities. The of goods and rendering of services (Cash Flow Statement) Commission assumed responsibility for these activities as a result of administrative orders made in October 2013, however this income was not included in the original budget. In addition, the Commission incurs expenditure on behalf of other Commonwealth entities and in turn, fully recovers these costs. This cost recovery revenue was $2.0m greater than the original budget; noting that, this expenditure and the corresponding recoveries are outside the control of the Commission.

Trade and other receivables Total trade and other receivables was less than original Trade and other receivables (Statement of Financial budget, mainly as a result of a decrease in appropriations Position) receivable following reductions in unspent prior year appropriations. $4.8m in prior year equity appropriations was repealed by the Statute Stocktake (Appropriations) Act 2013 in July 2013 and this reduction was not reflected in the original budget.

Property, plant and equipment The application of the Commission's Departmental Capital Property, plant and equipment (Statement of Financial Budget against Tourism intangible assets as described Position) above has resulted in lower funding being available for other asset purchases, which has also resulted in property, plant and equipment balances being lower than the original budget.

Part 04 / Financial statements 239

Australian Trade Commission Notes to and forming part of the financial statements

Contributions by owners Contributions by owners were greater than original budget, Contributions by owners (Statement of Changes in Equity) mainly as a result of a $3.0 million reallocation of funds from the operating budget to the capital budget at Additional Estimates 2014-15. In addition, the Commission received $2.8m in equity funding for employee liabilities assumed as a result of administrative orders made in October 2013. This was not included in the original budget.

240 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 29C: Administered Budgetary Reports

Administered Schedule of Comprehensive Income for the period ended 30 June 2015

Actual Budget estimate

2015

Original1 Variance2

2015 2015

$'000 $'000 $'000

NET COST OF SERVICES Expenses Employee benefits 5,234 5,465 (231)

Suppliers 1,547 1,430 117

Grants 139,220 132,505 6,715

Total expenses 146,001 139,400 6,601

Income

Revenue Non-taxation revenue Other revenue 270 - 270

Total non-taxation revenue 270 - 270

Total revenue 270 - 270

Total income 270 - 270

Net (cost of)/contribution by services (145,731) (139,400) (6,331)

Deficit attributable to the Australian Government (145,731) (139,400) (6,331)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services Other comprehensive income - - -

Total other comprehensive income

Total comprehensive income/(loss)

(145,731)

- -

(139,400) (6,331)

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided further below.

Part 04 / Financial statements 241

Australian Trade Commission Notes to and forming part of the financial statements

Administered Schedule of Assets and Liabilities as at 30 June 2015

Actual Budget estimate

2015

Original1 2015

Variance2 2015

$'000 $'000 $'000

ASSETS

Financial assets Cash and cash equivalents - - -

Trade and other receivables 41 90 (49)

(49)

Total financial assets 41 90

Total assets administered on behalf of Government 41 90

LIABILITIES

Payables Suppliers 52 79 (27)

Grants 635 160 475

Other payables 153 - 153

601 Total payables 840 239

Provisions Employee provisions 1,882 2,331 (449)

Grants provisions 6,066 6,438 (372)

(821)

(220)

171

Total provisions 7,948 8,769

Total liabilities administered on behalf of Government

Net assets/(liabilities)

8,788

(8,747)

9,008

(8,918)

2. Between the actual and original budgeted amounts for 2015. Explanations of major variances are provided further below.

242 Australian Trade Commission Annual Report 2014-15

Australian Trade Commission Notes to and forming part of the financial statements

Note 29D: Administered Major Budget Variances for 2015

Explanations of major variances Affected line items (and schedule)

Grants The calculation of the payout factor for EMDG is Grants expense (Administered Schedule of Comprehensive prescribed in the Export Market Development Grants Income) Regulations 2008. In years where there is strong demand for the scheme, as in 2015, it is possible for overspends to occur against the original budget. The overspend is due to the nature of this calculation and provisions recognised for likely payments arising from grants claims and appeals lodged but not yet finalised (2015: $6.066m).

T R A P 05 APPENDIXES

A Austrade and TradeStart locations in Australia, and TradeStart partners 244

B Austrade’s Service Charter 246

C Work health and safety 248

D Financial and staffing resources 250

E Ecologically sustainable development and environmental performance 253

F Advertising and market research 256

G List of requirements 262

244 Australian Trade Commission Annual Report 2014-15

Appendix A

Austrade and TradeStart locations in Australia, and TradeStart partners

Figure A1: Austrade’s national network, including TradeStart, at 30 June 2015

ACT VICTORIA

WESTERN AUSTRALIA

NORTHERN TERRITORY

QUEENSLAND

SOUTH AUSTRALIA

TASMANIA

NEW SOUTH WALES

Perth

Darwin

Townsville

Newcastle

Sydney Wollongong

Adelaide

Melbourne

Canberra

Bunbury

Rockhampton

Cairns

Nowra

Gosford Orange

Wagga Wagga

Mt Gambier

Tamworth

Brisbane

Port Augusta

Sunshine Coast

Gold Coast

TradeStart Location Austrade Location

Mackay

Riverland

Toowoomba

Port Macquarie

Miranda

Geelong

Albury-Wodonga

Hobart

245 Part 05 / Appendixes. Appendix A: Austrade and TradeStart locations in Australia, and TradeStart partners

Table A1: TradeStart locations and partners at 30 June 2015

Office location Partner name

New South Wales(a) and ACT

Sydney South and South West NSW Business Chamber

Port Macquarie NSW Trade & Investment

Gosford NSW Trade & Investment

Nowra NSW Trade & Investment

Wagga Wagga NSW Trade & Investment

Orange NSW Trade & Investment

Tamworth NSW Trade & Investment

Canberra Canberra Business Chamber

Victoria

Melbourne South and South East Australian Industry Group

Albury Australian Industry Group

Geelong Under negotiation

Queensland

Brisbane Australian Industry Group

Gold Coast Gold Coast City Council

Rockhampton Trade & Investment Queensland

Mackay Trade & Investment Queensland

Cairns Trade & Investment Queensland

Townsville Trade & Investment Queensland

Maroochydore Trade & Investment Queensland

Toowoomba Trade & Investment Queensland

Western Australia

Bunbury South West Development Commission

Perth Chamber of Commerce & Industry of WA

South Australia

Adelaide SA Department of State Development

Mt Gambier SA Department of State Development

Port Augusta SA Department of State Development

Berri SA Department of State Development

Tasmania

Hobart Tasmanian Chamber of Commerce & Industry

Northern Territory

Darwin Chamber of Commerce NT

(a) I n 2015-16, the TradeStart contract with NSW Trade & Investment will be transferred to the NSW Department of Premier and Cabinet.

246 Australian Trade Commission Annual Report 2014-15

Appendix B

Austrade’s Service Charter Austrade’s Service Charter sets out the level of service you can expect from Austrade.

Our service values

Austrade will endeavour to:

âº provide information and insight based on our experience and networks in Australia and around the world

âº be professional when assisting your organisation

âº be flexible and responsive to meet your particular business needs.

Our service standards for Australian exporters and education providers

âº We will clearly explain our service offerings as they apply to your business needs.

âº We will explain any fees associated with our services and provide you with a written quote before commencing work on your behalf.

âº If you contact us, we will respond within two working days of receiving your enquiry. If your enquiry is complex and we cannot respond immediately, we will inform you of our progress and work towards an agreed set of goals and deadlines.

âº We will maintain your confidentiality in accordance with the Australian Government’s legal and regulatory requirements, as well as government policies regarding the disclosure of information to Parliament and the Australian Government.

âº We will endeavour to connect your organisation with high-potential international business opportunities.

âº We will provide you with clear information about Austrade’s Export Market Development

Grants (EMDG) scheme, and will provide advice regarding your eligibility and the application and assessment process. We will process your application promptly and efficiently in accordance with the EMDG legislation.

âº If Austrade is unable to assist with your request, we will endeavour to refer you to appropriate service providers that may be better able to address your enquiry.

âº In line with Australia’s anti-bribery laws, we will not provide business-related services to any party that we are aware has breached laws prohibiting bribery and related behaviour. We will also report credible evidence of any breach to the relevant authorities.

Our service standards for international organisations seeking to invest in Australia or buy products or services from Australia

âº We will endeavour to introduce you to Australian business connections that can help you achieve your goals.

âº We will clearly explain the opportunities and sources of assistance that may be available to you within Austrade and from other organisations.

247 Part 05 / Appendixes. Appendix B: Austrade’s Service Charter

âº To assist you with your business needs, Austrade may provide your information to other Australian Government departments and Australian state and territory governments.

âº If Austrade is unable to assist with your request, we will endeavour to refer you to appropriate service providers that may be better able to address your enquiry.

Austrade’s multicultural plan

Under the Australian Government’s multicultural access and equity policy, government programmes and services should be accessible by all eligible Australians, respond to their needs, and deliver equitable outcomes for them regardless of their cultural or linguistic background.

Austrade is committed to ensuring that Australia’s culturally and linguistically diverse exporters are aware of our services and programmes, and have the potential to access our services.

Our 2013-2015 plan for implementing this vision is available on the Austrade website, www.austrade.gov.au.

Measuring our performance

From time to time, Austrade may seek your feedback directly or through a satisfaction survey. Your feedback helps us to improve our service delivery in Australia and overseas, and to identify issues that are important to you.

We welcome your feedback at all times. Simply call us, write to us or send us an email. If you have a problem you need resolved, please raise it directly with an Austrade staff member or write to the Austrade Services Manager.

If at any stage you are dissatisfied with how we are handling or have handled a complaint, you may contact an office of the Commonwealth Ombudsman and/or the Privacy Commissioner.

248 Australian Trade Commission Annual Report 2014-15

Appendix C

Work health and safety In accordance with Schedule2, Part4 of the Work Health and Safety Act 2011 (WHS Act), Austrade is required to provide details of the following matters in its annual report:

âº initiatives taken during the year to ensure the health, safety and welfare at work of workers who carry out work for the entity

âº health and safety outcomes (including the impact on injury rates of workers) achieved as a result of the initiatives taken during the year or previous initiatives

âº statistics of any notifiable incidents of which the entity becomes aware during the year that arose out of the conduct of undertakings by the entity

âº any investigations conducted during the year that relate to businesses or undertakings, including details of all notices given to the entity during the year under Part10 of the Act

âº such other matters required by guidelines approved on behalf of the Parliament by the Joint Committee of Public Accounts and Audit.

Austrade seeks at all times to provide a safe and healthy working environment for employees and others in Austrade workplaces. Austrade employees have access to work health and safety (WHS) information from Austrade’s Work Health and Safety Manager, Workplace Support Adviser, global human resource managers, and through the Austrade intranet.

Specific WHS initiatives and programmes conducted in 2014-15 included:

âº continuation of the twice-yearly global WHS forum, where staff provided feedback and suggestions for improvements to the agency’s safety management system

âº a briefing for the CEO, the Executive and Senior Executive Service staff, facilitated by an external legal practitioner in WHS, to report on recent developments in WHS

âº workshops for senior Austrade staff offshore to explain their duties under the WHS Act in relation to WHS due diligence and the practical steps they must take to promote safety at work, at events and while travelling

âº a workshop for internationally based human resource and finance managers to explain their role in promoting safety

âº provision of a new WHS training module for staff aimed at recognising their current WHS knowledge and delivering tailored modules to address identified knowledge gaps. The training was delivered to 1,138staff

âº continuation of the twice-yearly online compliance reporting tool for each Austrade office to ensure the health and safety features provided are maintained and serviced, hazards and risks are eliminated or managed, and legislative compliance is met where reasonably practicable

âº creation of online information resources to help workers understand their responsibilities under the WHS Act

âº refinement of online incident notification and reporting processes to aid compliance with the WHS Act

âº delivery of WHS manuals for all major Austrade offices to enable them to better manage their regional safety obligations, while ensuring smaller offshore offices remain engaged with the Austrade safety culture

âº voluntary free health checks and influenza vaccinations for Australia-based staff.

249 Part 05 / Appendixes. Appendix C: Work health and safety

The WHS Act requires Austrade to report all notifiable incidents to Comcare. During 2014-15, there were no notifiable incidents to report. TableC1 provides an overview of workplace incidents notified under health and safety legislation for the past three years.

Table C1: Workplace incidents notified by Austrade under health and safety legislation, 2012-13 to 2014-15

2012-13 2013-14 2014-15

Notifications 2 3 0

Incidents 0 0 1

investigated by Comcare

Comcare commenced an investigation into an allegation of workplace stress by an attached agency employee within Austrade’s international network. Austrade is cooperating closely with Comcare on this matter and the investigation is ongoing.

In March 2014, Austrade’s WHS management system was independently audited. The findings demonstrated that Austrade has a comprehensive, integrated WHS management system that continues to drive a safety culture across its global network. The next scheduled independent audit of the WHS management system will be in 2016.

250 Australian Trade Commission Annual Report 2014-15

Appendix D

Financial and staffing resources

Table D1: Agency resource statement, 2014-15

Actual Balance

available appropriation for 2014-15

Payments made 2014-15

remaining 2014-15 $’000

$’000 (A) $’000 (B) (A-B)

Ordinary annual services(a)

Departmental appropriation(b)

Prior-year departmental appropriation 37,801 11,274 26,527

Departmental appropriation 206,779 188,029 18,750

Section 74 retained revenue receipts(c) 25,998 25,998 -

Total 270,578 225,301 45,277

Administered expenses

Outcome 1 150,536 148,759 1,777

Total 150,536 148,759 1,777

Total ordinary annual services (A) 421,114 374,060 47,054

Other services

Departmental non-operating

Equity injections(d) 505 505 -

Total 505 505 -

Total other services (B) 505 505 -

Total available annual appropriations and payments 421,619 374,565 47,054

Total resourcing and payments (A+B) 421,619 374,565 47,054

Total net resourcing and payments for Austrade 421,619 374,565 47,054

(a) A ppropriation Act (No. 1) 2014-15, Appropriation Act (No. 3) 2014-15 and Appropriation Act (No. 5) 2014-15. This also includes prior-year departmental appropriation and section 74 retained revenue receipts.

(b) Includes an amount of $17.3 million in 2014-15 for the departmental capital budget. For accounting purposes, this amount has been designated as ‘contributions by owners’.

(d) Appropriation Act (No. 2) 2014-15. This may also include prior year-appropriation.

251 Part 05 / Appendixes. Appendix D: Financial and staffing resources

Table D2: Expenses for outcomes, 2014-15

Expenses for outcome 1

Outcome 1: Contribute to Australia’s economic prosperity by promoting Australia’s export and other international Actual

economic interests through the provision of information, Budget(a) expenses Variation advice and services to business, associations, 2014-15 2014-15 2014-15 institutions and government $’000 $’000 $’000

Programme 1.1: Promotion of Australia’s export and other international economic interests

Departmental expenses

Departmental appropriation(b) 187,003 192,855 5,852

Expenses not requiring appropriation in the budget year 17,500 18,234 734

Total for programme 1.1 204,503 211,089 6,586

Programme 1.2: Programmes to promote Australia’s exports and other international economic interests

Administered expenses

Ordinary annual services (Appropriation Act nos. 1, 3 and 5) 139,400 146,001 6,601

Total for programme 1.2 139,400 146,001 6,601

Outcome 1 totals by appropriation type

Administered expenses

Ordinary annual services (Appropriation Act nos. 1, 3 and 5) 139,400 146,001 6,601

Departmental expenses

Ordinary annual services (Appropriation Act nos. 1, 3 and 5) 187,003 192,855 5,852

Expenses not requiring appropriation in the budget year 17,500 18,234 734

Total expenses for outcome 1 343,903 357,090 13,187

Average staffing level (number) 957 972 15

(a) Full-year budget, including any subsequent adjustment made to the 2014-15 Budget at Additional Estimates.

(b) Departmental appropriation combines ordinary annual services (Appropriation Act nos. 1, 3 and 5) and retained revenue receipts under section 74 of the Public Governance, Performance and Accountability Act 2013.

252 Australian Trade Commission Annual Report 2014-15

Table D2: Expenses for outcomes, 2014-15 (continued)

Expenses for outcome 2

Actual

Outcome 2: The protection and welfare of Australians abroad through timely and responsive consular and passport services in specific locations overseas

Budget(a) 2014-15 $’000

expenses 2014-15 $’000

Variation 2014-15 $’000

Programme 2.1: Consular and passport services

Departmental expenses

Departmental appropriation(b) 12,818 12,058 (760)

Expenses not requiring appropriation in the budget year - 1,129 1,129

Total for programme 2.1 12,818 13,187 369

Outcome 2 totals by appropriation type

Departmental expenses

Ordinary annual services (Appropriation Act nos. 1, 3 and 5) 12,818 12,058 (760)

Expenses not requiring appropriation in the budget year - 1,129 1,129

Total expenses for outcome 2 12,818 13,187 369

Average staffing level (number) 39 41 2

(a) Full-year budget, including any subsequent adjustment made to the 2014-15 Budget at Additional Estimates.

253 Part 05 / Appendixes. Appendix E: Ecologically sustainable development and environmental performance

This appendix summarises Austrade’s performance with respect to the requirements of section516A of the Environment Protection and Biodiversity Conservation Act 1999.

Energy consumption

Austrade reported energy consumption in its Australian operations as required by the Energy Efficiency in Government Operations Policy. The Energy use in the Australian Government’s operations report 2007-08, released in December 2009, outlines the levels of energy usage and emissions for the Australian Government, at both whole-of-government and individual agency levels.

During 2014-15, Austrade’s energy consumption increased slightly on the previous year, with total electrical energy consumption (as a tenant) at 864,980kilowatt hours, a reduction of 193,730kilowatt hours on the 2009-10 baseline data. TableE1 shows Austrade’s energy consumption for the last six years, and the amount this has decreased from the 2009-10 baseline measurement.

Software, Workstation and Portability Programme 2015

As well as providing a significant uplift in capability to end users, Austrade’s Software, Workstation and Portability Programme 2015 (SWAPP2015) has seen a fleet of energy-efficient devices deployed in the agency. The central processing unit thermal power draw has been reduced by almost 60per cent, with a reduction from 35watts in the old fleet to 15watts in the new SWAPP2015 devices. For more information on SWAPP2015, see page166.

Videoconferencing

Austrade’s global videoconferencing facilities provide significant energy efficiencies through reduced travel for Austrade staff, and for staff of other government agencies who are authorised to use the facilities. In 2014-15, Austrade performed approximately 38,000videoconferences with approximately 41,000hours of calls from 103end points.

Appendix E

Ecologically sustainable development and environmental performance

Table E1: Austrade’s energy consumption, 2009-10 to 2014-15

Reporting year Total electrical energy consumption (kilowatt hours) Reduction of kilowatt hours from

2009-10 baseline

2009-10 1,058,710 -

2010-11 957,820 100,890

2011-12 943,675 115,035

2012-13 817,705 241,005

2013-14 775,732 282,978

2014-15 864,980 193,730

254 Australian Trade Commission Annual Report 2014-15

Earth Hour

Austrade provided staff with advice on how they could participate in Earth Hour 2015, both personally and through office activity, and coordinated the participation of Austrade offices across Australia and overseas. Where practicable, six national and 21international Austrade offices switched off lights, printers and photocopiers for the weekend of 28-29March 2015.

Waste

Austrade continued to manage and review approaches for minimising its environmental impact through established practices across Australia and overseas. These practices included reducing waste by establishing recycling systems for a range of office supplies, consumables and general waste from workspaces and staff kitchens.

Water

Water consumption is difficult for Austrade to measure on a broad scale as most of its tenancies are not separately metered for water consumption. Austrade’s facility and property managers continue to work with building owners, where possible, to improve water consumption and introduce water-saving measures, such as waterless urinals, dual-flush toilets and flow restrictors on taps.

Principles of ecologically sustainable development

Austrade operates under the Australian Trade Commission Act 1985 and administers the Export Market Development Grants scheme pursuant to the Export Market Development Grants Act 1997. While neither Act makes specific reference to ecologically sustainable development or sustainability principles, Austrade continues to adhere to government policy and ministerial directives on sustainability. TableE2 provides five-year trend information on Austrade’s energy efficiency performance.

255

Table E2: Energy efficiency performance, 2010-11 to 2014-15

Performance measure Indicator 2010-11 2011-12 2012-13 2013-14 2014-15

Total consumption of energy—includes all energy consumed when undertaking

Amount of electricity consumed (kWh)

2,293,430 2,199,260 2,121,797 2,129,455 1,655,767

the functions of the Amount of gas Not Not Not Not Not

agency, such as consumed available available available available available

energy consumed for Amount of other 5,048 8,217 6,820 8,688 5,171

office buildings and fuels consumed transportation )

(a)

(litres of petrol

Total consumption of Amount of 128,150 119,571 114,620 121,329 Not applicable—

green energy—includes the purchase of energy from sustainable sources

green energy consumed (kWh)

computer centres are now located off site under whole-of-government

arrangements

Relative energy uses— includes green energy use relative to non-renewable energy use

Proportion of green energy in total energy consumption

Green energy purchased for 10percent of Canberra computer centre usage each year from 2009-10 to 2013-14; computer centres located off site from 2014-15

and energy use per employee

Amount of total energy consumed per

Not Not Not Not Not

available available available available available

employee

kWh = kilowatt hours

(a) Estimate based on calculating kilometres travelled multiplied by fuel consumption rating.

Note: Due to Austrade being a tenant, some of the performance indicators listed on www.environment.gov.au/esd in relation to waste and water are not directly measured, so they have not been included in the table. Austrade works with building managers to ensure environmental initiatives are in place where possible. Austrade recycles waste paper, and encourages the use of recycled paper.

Part 05 / Appendixes. Appendix E: Ecologically sustainable development and environmental performance

256 Australian Trade Commission Annual Report 2014-15

For the 2014-15 financial year, particulars of payments of more than $12,565 (inclusive of GST) for advertising and market research services must be reported. As required under section 311A of the Commonwealth Electoral Act 1918, below and on the following pages are details of organisations contracted by Austrade to provide advertising and market research services.

Table F1 shows total advertising and market research expenditure for the year. Tables F2, F3, and F4 show individual payments in each category that were more than the $12,565 threshold. All amounts are reported at budget exchange rates and some totals may not add up due to rounding.

During 2014-15, Austrade did not make any payments to polling organisations and did not conduct any advertising campaigns.

Table F1: Total advertising and market research expenditure by category, 2014-15

Category Value ($)

Advertising agencies 940.50

Market research organisations 7,850,326.80

Polling organisations Nil

Direct mail organisations 124,257.42

Media advertising organisations 427,819.22

Total 8,403,343.95

Appendix F

Advertising and market research

257 Part 05 / Appendixes. Appendix F: Advertising and market research

Table F2: Individual payments of more than $12,565 to media advertising organisations, 2014-15

Organisation Description Amount ($)

Mitchell & Partners Australia 2015 review of the Export Market Development Grants scheme - advertising 16,187.29

Ho-Yuan Marketing Co. Ltd Australia: Future Unlimited education exhibition advertising (Taiwan) 42,928.40

Cong ty TNHH Do Phan Giai Cao Australia: Future Unlimited education exhibition advertising (Vietnam)

15,723.00

Mitchell & Partners Australia Australia Unlimited LinkedIn advertising 17,490.00

Mitchell & Partners Australia Australia Business Week in India 2015 advertising (digital display) 49,498.90

Kyowa Agency Australia: Future Unlimited education exhibition advertising (Tokyo) 36,085.56

Mitchell & Partners Australia Job recruitment advertisement - Senior Trade Commissioner roles 13,499.97

Mitchell & Partners Australia Job recruitment advertisement - Senior Trade Commissioner, Houston 13,109.48

Total 204,522.60

Table F3: Individual payments of more than $12,565 to direct mail organisations, 2014-15

Organisation Description Amount ($)

Teradata Australia Email subscription pages 15,881.25

Teradata Australia Maintenance, hosting and reporting 14,245.00

Total 30,126.25

258 Australian Trade Commission Annual Report 2014-15

Table F4: Individual payments of more than $12,565 to market research organisations, 2014-15

Organisation Description Amount ($)

AMR Interactive Market and social research - country reports 2014 55,000.00

Taylor Nelson Soffres (payment 1)

Service Improvement Study 2013-14 22,000.00

Taylor Nelson Soffres (payment 2)

Service Improvement Study 2013-14 22,000.00

Taylor Nelson Soffres Research free trade agreement trade identity 26,400.00

Australian Public Service Commission Australian Public Service Employee Census 2015 17,600.00

Department of Foreign Affairs and Trade ABS data on foreign direct investment flows and stock

15,905.00

The Economist Group (Asia/ Pacific) Research on impact of foreign direct investment and outlook on employment in Australia

30,764.91

ORC International Pty Ltd (payment 1) International Visitor Survey 2015 supplementary research - India

89,255.40

ORC International Pty Ltd (payment 2) International Visitor Survey 2015 supplementary research - India

89,255.40

ORC International Pty Ltd (payment 3) International Visitor Survey 2015 supplementary research - India

76,504.63

Roy Morgan Research Phone ownership data for National Visitor Survey 20,773.50

Deloitte Access Economics (payment 1) Macroeconomic analysis of visitor economy 55,000.00

Deloitte Access Economics (payment 2) Macroeconomic analysis of visitor economy 82,500.00

Deloitte Access Economics (payment 3) Macroeconomic analysis of visitor economy 82,500.00

Deloitte Access Economics (payment 1) Destination Visitor Survey - South Australia and Queensland

60,000.00

Deloitte Access Economics (payment 2) Destination Visitor Survey - South Australia and Queensland

60,000.00

Deloitte Access Economics (payment 3) Destination Visitor Survey - South Australia and Queensland

30,000.00

Orima Research (payment 1) Passenger Facilitation Survey and Report 27,478.00

Orima Research (payment 2) Passenger Facilitation Survey and Report 16,486.80

KPMG Advisory Services (payment 1) Study - Opportunity Assessment of Automotive Research and Development in India

14,603.45

259

Organisation Description Amount ($)

KPMG Advisory Services (payment 2) Study - Opportunity Assessment of Automotive Research and Development in India

13,153.81

AMR Interactive (payment 1) ASEAN research project 95,700.00

AMR Interactive (payment 2) ASEAN research project 79,750.00

Bremer & Co (payment 1) Research project: key foreign investment opportunities - material science 20,137.00

Bremer & Co (payment 2) Research project: key foreign investment opportunities - material science 20,138.00

Bremer & Co (payment 1) Research project: key foreign investment opportunities - medical technology 23,327.00

Bremer & Co (payment 2) Research project: key foreign investment opportunities - medical technology 23,328.00

Bremer & Co (payment 1) Research project: key foreign investment opportunities - digital technology/ICT 20,137.00

Bremer & Co (payment 2) Research project - key foreign investment opportunities - Digital Technology/ICT 20,138.00

Illuminate Research Asia Student research project - Indonesia 37,367.16

Taylor Nelson Soffres (payment 1)

Export Market Development Grants 2015 Survey 44,000.00

Taylor Nelson Soffres (payment 2)

Export Market Development Grants 2015 Survey 28,798.00

Taylor Nelson Soffres (payment 3)

Export Market Development Grants 2015 Survey 18,199.50

Taylor Nelson Soffres (payment 1)

Service Improvement Study 2014-15 13,200.00

Taylor Nelson Soffres (payment 2)

Service Improvement Study 2014-15 13,200.00

KPMG Export Market Development Grants economic

impact study for EMDG review

36,792.80

Colmar Brunton ASEAN economic community study 32,876.25

Fresh Agenda (payment 1) Agribusiness and food investment research project 19,900.00

Fresh Agenda (payment 2) Agribusiness and food investment research project 29,850.00

Fresh Agenda (payment 3) Agribusiness and food investment research project 49,750.00

BIS Shrapnel Engineering construction investment research

project

13,838.00

Part 05 / Appendixes. Appendix F: Advertising and market research

260 Australian Trade Commission Annual Report 2014-15

Organisation Description Amount ($)

Bremer & Co (payment 1) Phase 2 - Advanced material, science and technology research project 49,999.99

Bremer & Co (payment 2) Phase 2 - Advanced material, science and technology research project 49,999.99

Deloitte Access Economics Research report - Australian International Education 2025 49,005.00

BDA Marketing Planning (payment 1) Analysis of event visitors to help identify key barriers, ideas and opportunities (ACT)

22,000.00

BDA Marketing Planning (payment 2) Analysis of event visitors to help identify key barriers, ideas and opportunities (ACT)

22,000.00

Metrix Consulting (payment 1) Analysis of the differences between users and non-users of visitor centres (WA) 35,000.00

Metrix Consulting (payment 2) Analysis of the differences between users and non-users of visitor centres (WA) 35,000.00

EY Sweeney (payment 1) Analysis of the impact of cycle tourism in regional areas (VIC) 37,400.00

EY Sweeney (payment 2) Analysis of the impact of cycle tourism in regional areas (VIC) 25,850.00

Colmar Brunton (payment 1) Analysis of the cruise ship sector (NT) 46,750.00

Colmar Brunton (payment 2) Analysis of the cruise ship sector (NT) 46,750.00

ORIMA Research (payment 1) Analysis of the visitor information centres model - is it cost-effective and cost-efficient (NSW) 40,841.00

ORIMA Research (payment 2) Analysis of the visitor information centres model - is it cost-effective and cost-efficient (NSW) 70,708.00

ORC International Pty Ltd National Visitor Survey interviews July 2014 197,036.96

ORC International Pty Ltd National Visitor Survey interviews August 2014 197,036.96

ORC International Pty Ltd National Visitor Survey interviews September 2014 197,036.96

ORC International Pty Ltd National Visitor Survey Q3 September 2014 65,678.99

ORC International Pty Ltd National Visitor Survey interviews October 2014 197,036.96

ORC International Pty Ltd National Visitor Survey interviews November 2014 197,036.96

ORC International Pty Ltd National Visitor Survey interviews December 2014 197,036.96

ORC International Pty Ltd National Visitor Survey Q4 December 2014 65,678.99

ORC International Pty Ltd National Visitor Survey interviews January 2015 202,454.51

ORC International Pty Ltd National Visitor Survey interviews February 2015 202,454.51

ORC International Pty Ltd National Visitor Survey interviews March 2015 202,454.51

261

Organisation Description Amount ($)

ORC International Pty Ltd National Visitor Survey Q1 March 2015 67,484.84

ORC International Pty Ltd National Visitor Survey interviews April 2015 202,454.51

ORC International Pty Ltd National Visitor Survey interviews May 2015 202,454.51

ORC International Pty Ltd National Visitor Survey interviews June 2015 202,454.51

ORC International Pty Ltd National Visitor Survey Q2 June 2015 67,484.84

ORC International Pty Ltd International Visitor Survey interviews July 2014 221,536.59

ORC International Pty Ltd International Visitor Survey interviews August 2014 221,536.59

ORC International Pty Ltd International Visitor Survey interviews September 2014 221,536.59

ORC International Pty Ltd International Visitor Survey Q3 September 2014 73,845.53

ORC International Pty Ltd International Visitor Survey interviews October 2014 221,536.59

ORC International Pty Ltd International Visitor Survey interviews November 2014 221,536.59

ORC International Pty Ltd International Visitor Survey interviews December 2014 221,536.59

ORC International Pty Ltd International Visitor Survey Q4 December 2014 73,845.53

ORC International Pty Ltd International Visitor Survey interviews January 2015 227,627.76

ORC International Pty Ltd International Visitor Survey interviews February 2015 227,627.76

ORC International Pty Ltd International Visitor Survey interviews March 2015 227,627.76

ORC International Pty Ltd International Visitor Survey Q1 March 2015 75,875.92

ORC International Pty Ltd International Visitor Survey interviews April 2015 227,627.76

ORC International Pty Ltd International Visitor Survey interviews May 2015 227,627.76

ORC International Pty Ltd International Visitor Survey interviews June 2015 227,627.76

ORC International Pty Ltd International Visitor Survey Q2 June 2015 75,875.92

ORC International Pty Ltd International Visitor Survey - airport rental annual fee 55,000.00

Total 7,791,617.01

Part 05 / Appendixes. Appendix F: Advertising and market research

262 Australian Trade Commission Annual Report 2014-15

This list of requirements has been prepared in accordance with the Requirements for annual reports for departments, executive agencies and other non-corporate Commonwealth entities, which were approved by the Joint Committee of Public Accounts and Audit and published on 25June 2015. Austrade’s compliance with these requirements is shown in TableG1.

Table G1: List of requirements

Description Requirement Page

Letter of transmittal Mandatory ii

Table of contents Mandatory iii

Index Mandatory 270-9

Glossary Mandatory 269

Contact officer(s) Mandatory 280

Internet home page address and internet address for report Mandatory 280

Review by Chief Executive Officer

Review by Chief Executive Officer Mandatory 7-12

Summary of significant issues and developments Suggested 7-12, 13-4

Overview of agency’s performance and financial results Suggested 7-12, 13-4, 18-31, 113-5, 127-9

Outlook for following year Suggested 10-2

Significant issues and developments—portfolio Portfolio

departments— suggested

Not applicable(a)

Agency overview

Role and functions Mandatory Inside front cover,

2-3

Organisational structure Mandatory 6

Outcome and programme structure Mandatory 16

Where outcome and programme structures differ from PBS/ PAES or other portfolio statements accompanying any other additional appropriation bills (other portfolio statements), details of variation and reasons for change

Mandatory Not applicable— no change

Portfolio structure Portfolio

departments— mandatory

Not applicable(a)

Appendix G

List of requirements

263 Part 05 / Appendixes. Appendix G: List of requirements

Description Requirement Page

Report on performance

Review of performance during the year in relation to programmes and contribution to outcomes Mandatory 15-132

Actual performance in relation to deliverables and key performance indicators set out in PBS/PAES or other portfolio statements

Mandatory 18-31, 113-5,

127-9

Where performance targets differ from the PBS/PAES, details of both former and new targets, and reasons for the change Mandatory 129

Narrative discussion and analysis of performance Mandatory 15-132

Trend information Mandatory 14, 42, 51, 117, 118,

132, 164

Significant changes in nature of principal functions/services Suggested 101-2

Performance of purchaser/provider arrangements If applicable, suggested 108-9

Factors, events or trends influencing agency performance Suggested 33, 51, 57-8, 68-70

Contribution of risk management in achieving objectives Suggested 124, 141-3

Performance against service charter customer service standards, complaints data, and the agency’s response to complaints

If applicable, mandatory

41-43, 246-7

Discussion and analysis of the agency’s financial performance Mandatory 13-4

Discussion of any significant changes in financial results from the prior year, from budget or anticipated to have a significant impact on future operations

Mandatory 13-4

Agency resource statement and summary resource tables by outcomes Mandatory 250-2

Management and accountability

Corporate governance

Agency heads are required to certify their agency’s actions in dealing with fraud Mandatory ii

Statement of the main corporate governance practices in place Mandatory 134-8

Names of the senior executive and their responsibilities Suggested 135-6

Senior management committees and their roles Suggested 137-9

Corporate and operational plans and associated performance reporting and review Suggested 139-40

264 Australian Trade Commission Annual Report 2014-15

Description Requirement Page

Internal audit arrangements including approach adopted to identifying areas of significant financial or operational risk and arrangements to manage those risks

Suggested 141-3

Policy and practices on the establishment and maintenance of appropriate ethical standards Suggested 137

How nature and amount of remuneration for SES officers is determined Suggested 146-7

External scrutiny

Significant developments in external scrutiny Mandatory 143-5

Judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner Mandatory 144

Reports by the Auditor-General, a parliamentary committee, the Commonwealth Ombudsman or an agency capability review

Mandatory 144

Management of human resources

Assessment of effectiveness in managing and developing human resources to achieve agency objectives Mandatory 145-60

Workforce planning, staff retention and turnover Suggested 148

Impact and features of enterprise or collective agreements, individual flexibility arrangements (IFAs), determinations, common law contracts and Australian Workplace Agreements (AWAs)

Suggested 145-7

Training and development undertaken and its impact Suggested 141, 152-4, 157, 160, 163

Work health and safety performance Suggested 131, 160, 248-9

Productivity gains Suggested 147, 165-8

Statistics on staffing Mandatory 148-52

Statistics on employees who identify as Indigenous Mandatory 148

Enterprise or collective agreements, IFAs, determinations, common law contracts and AWAs Mandatory 145-7

Performance pay Mandatory 156

Assets management

Assessment of effectiveness of assets management If applicable, mandatory 161

265

Description Requirement Page

Purchasing

Assessment of purchasing against core policies and principles Mandatory 163

Consultants

The annual report must include a summary statement detailing the number of new consultancy services contracts let during the year; the total actual expenditure on all new consultancy contracts let during the year (inclusive of GST); the number of ongoing consultancy contracts that were active in the reporting year; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST). The annual report must include a statement noting that information on contracts and consultancies is available through the AusTender website

Mandatory 163-4

Australian National Audit Office access clauses

Absence of provisions in contracts allowing access by the Auditor-General Mandatory 163

Exempt contracts

Contracts exempted from publication in AusTender Mandatory 163

Small business

Procurement initiatives to support small business Mandatory 164

Financial statements

Financial statements Mandatory 169-242

Other mandatory information

Work health and safety (Schedule 2, Part 4 of the Work Health and Safety Act 2011) Mandatory 160, 248, 249

Advertising and market research (section 311A of the Commonwealth Electoral Act 1918) and statement on advertising campaigns

Mandatory 256-61

Ecologically sustainable development and environmental performance (section 516A of the Environment Protection and Biodiversity Conservation Act 1999)

Mandatory 253-5

Compliance with the agency’s obligations under the Carer Recognition Act 2010 If applicable, mandatory

Not applicable

Grants programmes (b) Mandatory 77

Part 05 / Appendixes. Appendix G: List of requirements

266 Australian Trade Commission Annual Report 2014-15

Description Requirement Page

Disability reporting—explicit and transparent reference to agencylevel information available through other reporting mechanisms

Mandatory 157-8

Information Publication Scheme statement Mandatory 145

Correction of material errors in previous annual report If applicable, mandatory Not applicable

Agency resource statements and resources for outcomes Mandatory 250-2

List of requirements Mandatory 262-66

PBS = Portfolio Budget Statements

PAES = Portfolio Additional Estimates Statements

(a) A ustrade is not a portfolio department so this requirement is not applicable.

(b) Austrade administers the Export Market Development Grants (EMDG) scheme. It is a legislated scheme, not a discretionary grants programme, so a page reference for the EMDG scheme has not been included under this requirement. For information on the EMDG scheme, see pages 113-25.

267

List of figures and tables

Figures

Figure 1: Austrade’s Australian and overseas locations at 30 June 2015 4

Figure 2: Austrade’s organisational structure at 30 June 2015 6

Figure 3: Austrade’s outcome and programme reporting framework for 2014-15 16

Figure 4: Australian goods exporters, 2013-14 34

Figure 5: Australian services exporters, 2013-14 34

Figure 6: Australia’s top 10 export destinations for goods and services, 2014 35

Figure 7: Composition of Australia’s top 10 exports, 2014 36

Figure 8: Client ratings of Austrade’s service, 2011 to 2015 42

Figure 9: Importance of various market development activities in earning international revenue 49

Figure 10: Most significant barriers to doing business in overseas markets 49

Figure 11: Australia’s education exports, 2005 to 2014 51

Figure 12: Austrade’s investment attraction life cycle 57

Figure 13: Austrade-assisted investment outcomes by source market, 2014-15 59

Figure 14: Austrade-assisted investment outcomes by industry sector, 2014-15 59

Figure 15: International visitors in Australia, year ending March 2015 68

Figure 16: Visitor numbers and spend by state and territory, year ending March 2015 69

Figure 17: Domestic travel in Australia, year ending March 2015 70

Figure 18: Australian tourism investment pipeline, 2014 71

Figure 19: Popular tweet from Austrade’s Twitter account in 2014-15 110

Figure 20: EMDG recipients by annual income, 2013-14 grant year 119

Figure 21: EMDG recipients by number of employees, 2013-14 grant year 119

Figure 22: EMDG recipients by annual export earnings, 2013-14 grant year 120

Figure 23: EMDG recipients by state and territory, 2013-14 grant year 120

Figure 24: EMDG recipients by industry, 2013-14 grant year 121

Figure 25: Top six markets targeted by EMDG recipients, 2013-14 grant year 121

Figure 26: EMDG recipients by expenditure category, 2013-14 grant year 122

Figure 27: Austrade’s executive management structure 139

Figure 28: The relationship between Austrade’s key planning processes in 2014-15 140

Figure 29: The Austrade on the Go programme 168

Tables

Table 1: Austrade’s financial performance, 2011-12 to 2014-15 14

Table 2: Summary of results for programme 1.1 deliverables 19

Table 3: Summary of results for programme 1.1 key performance indicators 27

Table 4: Reports released by Tourism Research Australia, 2014-15 81

Table 5: Summary of results for programme 1.2 deliverables 114

Table 6: Summary of results for programme 1.2 key performance indicators 115

Table 7: Payments to EMDG recipients, 2010-11 to 2014-15 117

Table 8: Profile of EMDG applicants and recipients, by grant year, 2009-10 to 2013-14 118

Table 9: EMDG recipients by business type, 2013-14 grant year 119

Table 10: EMDG recipients by state and territory, 2012-13 and 2013-14 grant years 120

268 Australian Trade Commission Annual Report 2014-15

Table 11: Appeals to the Administrative Appeals Tribunal under the EMDG Act in 2014-15 125

Table 12: Summary of results for programme 2.1 deliverables 128

Table 13: Summary of results for programme 2.1 key performance indicators 129

Table 14: Austrade-managed consulates at 30 June 2015 130

Table 15: Consular assistance provided by Austrade, 2010-11 to 2014-15 132

Table 16: Austrade’s committees and subcommittees in 2014-15 138

Table 17: Austrade employees covered by workplace, collective, common law, and individual flexibility agreements at 30 June 2015 147

Table 18: Ongoing and non-ongoing employees (excluding overseas-engaged employees), full-time and part-time, at 30 June 2015 148

Table 19: Ongoing and non-ongoing employees (excluding overseas-engaged employees), full-time and part-time, who identify as Indigenous at 30 June 2015 148

Table 20: Employees by category of employment and gender at 30 June 2015 149

Table 21: Employees by classification, gender and location at 30 June 2015 149

Table 22: Employees by location and gender at 30 June 2015 150

Table 23: Employees by group or division at 30 June 2015 151

Table 24: Senior Executive Service by classification and gender at 30 June 2015 151

Table 25: Senior Executive Service by classification and location at 30 June 2015 152

Table 26: Senior Executive Service gains and losses during 2014-15 152

Table 27: Foreign language capabilities at Austrade, priority languages, at 30June 2015 154

Table 28: Trends in consultancies, 2010-11 to 2014-15 164

Appendixes

Figure A1: Austrade’s national network, including TradeStart, at 30 June 2015 244

Table A1: TradeStart locations and partners at 30 June 2015 245

Table C1: Workplace incidents notified by Austrade under health and safety legislation, 2012-13 to 2014-15 249

Table D1: Agency resource statement, 2014-15 250

Table D2: Expenses for outcomes, 2014-15 251

Table E1: Austrade’s energy consumption, 2009-10 to 2014-15 253

Table E2: Energy efficiency performance, 2010-11 to 2014-15 255

Table F1: Total advertising and market research expenditure by category, 2014-15 256

Table F2: Individual payments of more than $12,565 to media advertising organisations, 2014-15 257

Table F3: Individual payments of more than $12,565 to direct mail organisations, 2014-15 257

Table F4: Individual payments of more than $12,565 to market research organisations, 2014-15 258

Table G1: List of requirements 262

269 Abbreviations and acronyms

Abbreviations and acronyms

AAT Administrative Appeals Tribunal

ABS Australian Bureau of Statistics

ADS Approved Destination Status

AFC Asian Football Confederation

AGIMO Australian Government Information Management Office

ANAO Australian National Audit Office

AOPL Austrade overseas

performance level

APEC Asia-Pacific Economic Cooperation

APL Austrade performance level

APS Australian Public Service

ASCOT Australian Standing Committee on Tourism

ASEAN Association of Southeast Asian Nations

AS/NZS Australian Standard/New Zealand Standard

Austrade Australian Trade Commission

CEO chief executive officer

ChAFTA China-Australia Free Trade Agreement

CRICOS Commonwealth Register of Institutions and Courses for Overseas Students

CSIRO Commonwealth Scientific and Industrial Research Organisation

DFAT Department of Foreign Affairs and Trade

EMDG Export Market Development Grants

EMDG Act Export Market Development Grants Act 1997

FDI foreign direct investment

FOI Act Freedom of Information Act 1982

FTA free trade agreement

GDP gross domestic product

GST goods and services tax

ICC International Cricket Council

ICT information and

communications technology

IMF International Monetary Fund

IP intellectual property

ISO International Organization

for Standardization

IT information technology

JAEPA Japan-Australia Economic Partnership Agreement

KAFTA Korea-Australia Free Trade Agreement

KPI key performance indicator

LNG liquefied natural gas

METS mining equipment, technology and services

MIP Market Information Package

OECD Organisation for Economic Co-operation and Development

OEE overseas-engaged employee

PIV Premium Investor Visa

PNG Papua New Guinea

PRETSS policy, research, equipment, technology, skills and service

SES Senior Executive Service

SIV Significant Investor Visa

SME small to medium-sized enterprise

SWAPP2015 Software, Workstation and Portability Programme 2015

TAFE technical and further education

TDDI Tourism

Demand-Driver Infrastructure

TEP tourism employment plan

TIRF Tourism Industry Regional

Development Fund

TRA Tourism Research Australia

VET vocational education and training

WHS work health and safety

WHS Act Work Health and Safety Act 2011

WIGB Women in Global Business

270 Australian Trade Commission Annual Report 2014-15

Index

A Aboriginal and Torres Strait Islander peoples, 158, 159 ABS Tourism Satellite Account, 80 Abu Dhabi office, 98 Accessing Global Value Chains five-year strategy, 37 Administration of the Export Market Development

Grants scheme (Audit Report no. 15, 2014-15), 144 Administrative Appeals Tribunal (AAT), 124-5, 144 Administrative Appeals Tribunal Act 1975, 163

advanced manufacturing, services and technology, 7, 12, 57, 60 foreign direct investment, 59 manufacturing innovation, 33 advertising, 256-7 aerospace global value chains, 33, 37, 90, 104 Africa, 39 aged care sector, 32, 45, 91, 109 agency agreements, 108-9 agency resource statement, 2014-15, 250 agribusiness, 32, 43, 57, 58, 60, 93, 94, 97, 102, 109,

126

foreign direct investment, 59, 62, 63 Agricultural Competitiveness White Paper, 102, 103 air transport, 73 annual reports, 157, 164, 262 anti-bribery, 48, 142-3, 163 ANZ Global Wealth, 45 Approved Destination Status (ADS) scheme

China, 82 Code of Business Standards and Ethics, 82 APS Diversity Council Award for Indigenous Employment, 158

APS employee census, 10, 145 APS Statistical Bulletin, 157 APS values and employment principles, 156 Argentina, 97 AS 8001:2003 Fraud Corruption and Control, 142 AS/NZS ISO 31000:2009 Risk Management, 141, 142 Asia Marketing Fund, 78 Asia-Pacific Economic Cooperation (APEC), 46 Asialink Business, 40 Asialink Leaders Programme scholarships, 155 Asian Business Engagement Plan, 126 Asian Cup (AFC), 9, 43, 63, 107 Association of Southeast Asian Nations (ASEAN)

economic diplomacy, 91 foreign direct investment, 58 market, 12, 32, 35, 64, 89, 90 member states, 89, 90-1 Atomo Diagnostics, 39 Attorney-General’s Department, 162 Attracting business events to Australia guide, 78, 79 Audit and Risk Committee, 134, 137, 138, 141, 142, 143,

144

Auditor-General, 144, 163 audits, 141, 143, 144 AusBiotech, 44 AusTender, 163, 164 Austmine, 44, 45, 105 Austrade Anywhere, 166 Austrade Direct, 38 Austrade Enterprise Agreement 2012-2014, 146, 147 Austrade on the Go programme, 168 Austrade services to government, 45 Austrade Student Centre website. see Study in

Australia website Australia Business Week in India, 9, 62, 84-5, 104, 105, 110, 111 Australia Day Achievement Medallions, 157 Australia Unlimited brand, 62, 105, 111

MENA 2015, 111 Australia Week events, 11-12, 13, 103 Australia Week in China, 44, 74, 87 Australia-China Tourism Dialogue, 82 Australia-India Comprehensive Economic

Cooperation Agreement, 83, 105 Australia-Sichuan aged care training forum, 56 Australian Chamber of Commerce and Industry, 111 Australian Criminal Code, 142 Australian Export Awards, 111-12 Australian Government

Cloud Computing Policy, 166 Protective Security Policy Framework, 162 Public Sector Workplace Bargaining Policy, 147 Australian Government Information Management

Office (AGIMO), 167 Australian Grape and Wine Authority, 96 Australian Innovation Showcase, 84 Australian International Education 2025, 9, 12, 51-2,

100

Australian Investment Forum, 2014, 61

271

Australian Made Campaign, 112 Australian National Audit Office (ANAO), 134 Australian Network on Disability (AND), 160 Australian Public Service

employee census and survey, 10, 145 Values and Code of Conduct, 141 Australian Public Service Commission, 153 Australian Regional Tourism Network, 75, 101 Australian Services Roundtable, 40 Australian Standing Committee on Tourism (ASCOT),

25, 72, 75, 101 Australian Suppliers Directory, 43 Australian Taxation Office, 38 Australian Technologies Competition, 44 Australian Tourism Export Council, 75, 101 Australian Tourism Investment Attraction Partnership,

Australian Trade Commission Act 1985, iv, 3, 134, 139, 143, 254 Australia’s International Business Survey 2014, 48

2015, 10, 48 automotive industry, 86 global value chains, 37

Senate inquiry, 108 awards export, 111-12

staff, 156-7

B barriers to business, 12, 40, 48, 49, 75, 102 Beryl Wilson Austrade Scholarship for Women in International Business, 45, 47, 155

BHP Billiton, 98, 123 Bliss, Milena, 126 Boyer, Daniel, 76 Brand Australia. see Australia Unlimited brand Brand Australia programme, 110-11 Brazil, 56, 97, 98, 105 bribery. see anti-bribery briefings. see parliamentary inquiries and briefings Brunei, 89 Budget 2015-16, 10, 13 Building Dairy Investment Coordination workshop, 62 business continuity planning, 130-1, 161

business events industry, 75, 78, 79 Business Events Roundtable, 75 business systems, 165

C Cambodia, 45, 89 Canada, 73, 105, 132 capability

development programmes, 152-3, 154 languages, 154 leadership, 154 reports, 43 Cerrejon, 37 Charles Darwin University, 112 cherry exports, 94 Chief Counsel, Legal, Procurement and Fraud, 137 Chief Executive Officer (CEO), 135

2014-15 review, 7-12 instructions, 141, 163 letter, ii responsibilities, 107, 134 Chief Finance Officer’s report, 13 China

air services agreement, 82 Approved Destination Status (ADS) scheme, 82 Australia Week in China, 44, 74, 87 Australia’s trade relationship, 87-9 e-commerce, 10, 12, 88, 89 education market, 87 foreign direct investment, 58, 74, 87 tourism agreements, 82 visas reforms for Chinese nationals, 8, 11, 72, 77 visitors to Australia, 68, 80, 82, 87 China Entrepreneur Club, 62, 63 China International Education Exhibition Tour, 52 China Tourism Academy, 82 China-Australia Free Trade Agreement (ChAFTA), 40,

80, 89

client service, 3, 41. see also Service Improvement Study client surveys, 3, 7, 41-2, 115, 116 codes of conduct, 141 Colombia, 37, 97, 105, 161 Commonwealth Authorities and Companies Act 1997,

Index

272 Australian Trade Commission Annual Report 2014-15

Commonwealth Bank, 112 Commonwealth Contracting Suite, 164 Commonwealth Director of Public Prosecutions, 124 Commonwealth Disability Strategy, 157, 158 Commonwealth Electoral Act 1918, 256 Commonwealth Ombudsman, 144, 247 Commonwealth Procurement Rules, 163, 164 Commonwealth Scientific and Industrial Research

Organisation (CSIRO), 56, 86, 103 complaints, 43 compliments, 43 consular services

deliverables, 127, 128 objective, 127 passport applications, 131 performance indicators, 127, 129 statistics, 10, 127, 132 consulates

activities, 130-1 Consular Officer, Vancouver, 131 Houston, 93, 130, 161 locations, 130 consultancies, 164 Consultant Quality Incentive Programme, 122, 124 consultants, 163-4 contingency plans (consular), 130-1 corporate governance, 134-8 Corporate Governance Forum, 134 Corporate Plan 2014-15, 16 corporate planning, 139-41 corruption laws, 48. see also anti-bribery Council of Australian Governments, 53 Courage: Inclusive Leadership in Action, 154 Craig Senger Scholarship, 155 Cricket World Cup (ICC), 9, 23, 43, 63, 69, 72 cross-cultural competency, 154

D Dairy Australia, 62, 89 data centres, 165-6, 167 Deakin University, 86 Defence Materiel Organisation, 112 Department of Agriculture, 85, 89, 99, 103, 108 Department of Education and Training, 54, 86, 99, 100 Department of Foreign Affairs and Trade (DFAT), 1, 2,

9, 11, 39, 46, 55, 63, 70, 77, 78, 83, 85, 86, 91, 97, 100, 102, 106, 108, 111, 129, 131, 135, 154, 161, 162, 166 Department of Immigration and Border Protection, 8, 11, 54, 72, 76, 99, 100, 102, 103 Department of Industry and Science, 11, 40, 44, 63, 86, 99, 103 Department of Infrastructure and Regional Development, 73, 85, 99 Department of the Prime Minister and Cabinet, 8, 99, 102, 136 Destination Visitor Survey, 78, 79 Disability ACT, 157 disability employment programme, 157 disability reporting, 157 Disability Training Awareness workshop, 157 diversity and inclusion, 157

E e-commerce, 32, 36, 48, 88, 89 E-commerce in China: A guide for Australian business, 88

ecologically sustainable development, 253-5 economic diplomacy, 55, 83, 90, 91, 103, 106 Economics at Austrade blog, 109 education agents (offshore), 55 education industry

agents, 55 Austrade’s goals, 50 Australian International Education 2025, 9, 12, 51-2, 100

Brazil education mission, 56 China market, 87 data trends, 54 Future Unlimited brand, 10, 50, 52, 55, 111 global alumni engagement strategy, 55, 100, 111 India market, 86 Japan market, 50, 55 market research and intelligence, 53 marketing, internationally, 52-3, 100 opportunities identified, 54 performance, 51 social media, 53 stakeholder engagement, 55, 56, 100 statistics, 51, 52

273

student enrolments in Australia, 51, 91 Study in Australia, 10, 50, 52, 53 value, international market, 51, 91 vocational education and training (VET), 56 Education Visa Consultative Committee, 100 Efic. see Export Finance and Insurance Corporation Eiken Foundation, 50 emerging markets (education), 50, 54 employee census (APS), 145 employee recognition, 156 employees. see staff employment framework, 145-6 Energy White Paper—Austrade, 102 Engaging with Developed Asia: Free Trade

Agreements (speaker series), 45 Enterprise Vault, 167 environmental performance, 253-5 Ethics Committee, 134, 137, 138 European Association for International Education, 52 European Union, 35

foreign direct investment, 58 Executive Group, 134, 135-6, 138 executive management structure, 139 expenditure, 13 Export Council of Australia, 10, 48 Export Finance and Insurance Corporation (Efic), 10,

40, 48

Export Market Development Grants Act 1997, 116, 143, 144, 254 Export Market Development Grants (EMDG) scheme appeals, 124

applicants, 118 applications, 124 appropriation, 122 communication and promotion, 124 consultants, 122, 124, 125 deliverables, 114 40th anniversary, 124 fraud, 124 funding, 122 litigation, 162, 163 outcomes, 117 payments, 117 performance

administrative, 124 indicators, 115

purpose, 116 recipient profiles, 118-22 review, 116 risk management, 124 statistics overview, 9, 113, 117 Export Market Development Grants (Extended

Lodgement and Consultant Quality Incentive) Determination 2012, 122 exporters. see also global value chains Austrade assistance, 36-49 awards, 111-12 statistics, 33-4 exports compositions, 35-6 destinations, 35 statistics, 33, 34, 87 external scrutiny, 144-5 Eyres, Tony, 65

F Field, Paul, 66 financial management, 161-4 Financial Management and Accountability Act 1997,

143

financial performance, 14-15 financial resources, 250 financial services sector, 95 financial statements, 173-242 food and beverage sector

foreign direct investment, 59, 62, 63 markets, 32, 88, 89, 90, 94, 96 Food Innovation Australia Limited, 44 Foreign Affairs, Defence and Trade References

Committee, 108 foreign direct investment (FDI) ASEAN, 58 attracting inward investment, 57-64

Austrade’s role, 7, 57 China, 58, 74, 87 Europe, 58, 61 events promoting, 61-3 identification of pipeline projects, 60 India, 84 inward investment outcomes, 58-9 Japan, 58, 64, 97

Index

274 Australian Trade Commission Annual Report 2014-15

Korea, 58 Northern Australia Investment Forum, 11, 63, 64, 100 operating context, 57-8 outlook, 10-2 priority milestones, 59-60 priority sectors, 57, 59 research projects, 60 senior investment specialists, 65-7 sources, 58, 59 statistics, 58 stock of, 58 Thailand, 90 tourism, 73-4, 79 training courses, 60 United Kingdom, 58 United States, 58, 92-3 foreign government delegations, 43, 106-7 fraud control, 142

EMDG scheme, 124 Fraud control arrangements (Audit Report no. 3, 2014-15), 144 Fraud control in Australian Government entities, 142 free trade agreements (FTAs), 7, 9, 10, 11, 12, 13, 39-40,

45, 64, 99, 108. see also China-Australia Free Trade Agreement; Japan-Australia Economic Partnership Agreement; Korea-Australia Free Trade Agreement freedom of information, 145 Freedom of Information Act 1982, 144, 145, 163 function, 2 Funder, Hugh, 67 funding, 13 Future Unlimited brand, 10, 50, 52, 55, 111

G Germany, 121 Global Austrade Staff Awards, 156, 166 Global News, 141 global value chains, 12, 32, 33, 36-7, 48, 86, 116 goods exports, 34 governance, 134-9 GP Graders, 112 A guide to developing tourism employment plans, 76 Gulf Cooperation Council countries, 63

H Hastings Fund Management, 95 health sector, 32, 39, 91, 103, 104 Health Vocational Education, 56 highlights, i history, iv Hong Kong, 73, 121 House With No Steps, 157 Houston office, 7, 92-3, 130, 161 The Hub, 141, 165 human resources management, 145-60

I ICT strategy, 165-7 initiatives, 167-8 Inclusive Leadership Programme, 154 Income Tax Assessment Act 1936, 38 independent audits, 144 India

Australia Business Week, 9, 62, 84-5, 100, 104, 105, 110, 111 Australia’s trade relationship, 83-6 as education market, 86 foreign direct investment, 84 free trade agreement negotiations, 104 visas reform for Indian nationals, 30

Indigenous Australian Government Development Programme, 158 Indigenous Cadetship Support Programme, 158, 159 Indigenous Champion, 158 Indigenous programmes, 158 Indigenous Working Group, 158 individual flexibility arrangements, 146, 147 Indonesia, 12, 40, 46, 49, 64, 89, 90, 91 Information and Technology Services Branch, 168 Information Commissioner, 144 Information Publication Scheme, 145 information systems

business systems, 165 cloud-based service delivery, 165, 166 data centres, 165-6 equipment replacement, 168 mobility support, 166, 168 security, 167 wide area network, 166

275 Index

infrastructure, 33, 43. see also tourism infrastructure foreign direct investment, 57, 59, 63 infrastructure markets, 33, 105 Inquiry into the Development of Northern Australia, 107 internal audit, 141, 143 internal controls, 141-2 International Business Survey

2014, 48 2015, 10, 48 International Civil Aviation Organization Air Services Negotiation Event (ICAN 2014), 73, 101

International Dairy Investment Forum, 62 international education sector. see education industry International Mining and Resources Conference, 62, 111

International Monetary Fund (IMF), 33 international sports business (Match Australia), 9, 12, 13, 43-4, 63 international students, 51, 91 International Visitor Survey, 79, 80 investment, 12, 44, 48, 92, 98. see also foreign

direct investment Investment Attraction Partnership Group, 73, 74 investment development. see foreign direct investment Investment Statement, 8 Investor Update, 109 inward investment. see foreign direct investment IT. see information systems Italy, 61

J Japan, 9, 32, 35, 39, 40, 50, 55, 58, 64, 73, 96-7 Japan agent engagement report: Realising productive partnerships, 55

Japan-Australia Economic Partnership Agreement (JAEPA), 39, 40, 96, 97 Joint Select Committee on Northern Australia, 107, 108 Joint Select Committee on Trade and Investment

Growth, 108

Joint Standing Committee on Foreign Affairs, Defence and Trade, 108 judicial decisions, 144

K Karoon Energy International, 98 Kelly, Carole, 132 Korea, 32, 40, 58, 93-5 Korea-Australia Free Trade Agreement (KAFTA), 9, 39,

40, 64, 93, 94-5, 108 Kuwait, 105

L Landbridge, 87 language capabilities, 154 Laos, 89 Latest from Austrade stories, 109 Latin America, 37, 97, 98, 105 Latin America—transnational education, 56 leadership capability, 154 legal services, 162-3 legislation, 3, 143 letter to Minister, ii Li, Fei, 47, 155 Liu, Bing, 89 Livewell employee assistance programme, 160 Local Government Area Profiles (tourism), 80 locations, 4-5, 244, 281

M Major Sporting Events Taskforce, 43 Malaysia, 64, 73, 89, 90, 91 Malcolm, Craig, 41 management committees, 134, 137-8 manufacturing sector. see advanced manufacturing,

services and technology Market Information Package (MIP), 53-4, 55 market research, 256, 257-61 Match Australia programme, 9, 12, 13, 43-4, 63 Meat & Livestock Australia, 89 media and communications, 109-10 medical technology, 39 Mental Health Month, 160 Metwalli, SaÃ¯d, 98 Mexico, 97, 98 Middle East, 38, 39, 105 Migration Act 1958, 162 mining and resources sector, 105, 106

276 Australian Trade Commission Annual Report 2014-15

ning equipment, technology and services (METS), 37, 45, 83, 105 Mining Indaba 2015, 111 Minister for Trade and Investment, 3, 8, 40, 44, 47, 51,

61, 78, 84, 87, 90, 99, 101, 105, 107, 110, 111, 112, 116, 132, 134, 155 ministerial activities in Australia, 40, 47, 51, 61, 63, 78, 101, 106-7, 111-12,

155

overseas visits, 12, 44, 78, 84, 87, 90, 104-6, 132 ministerial briefs, 107 ministerial correspondence, 107 ministerial directions, 134 ministerial responsibilities, 3 Minister for Small Business, 40 MIP Weekly, 53 Monash Institute of Pharmaceutical Sciences, 64 Monash University, 64, 155 multicultural plan, 247 multiple entry visitor visa, 72 Myanmar, 56, 73, 89, 100

N National Disability Strategy 2010-2020, 158 National Investment Advisory Board, 99, 100 National Strategy for International Education, 51, 100 National Tourism Accreditation Framework (T-QUAL),

National Tourism Alliance, 75, 101 National Visitor Survey, 69, 79, 80 network, 83, 109, 136, 158, 161, 162, 165, 168 A new model for VET growth in South Asia, 56 New Zealand, 69, 87, 100, 105

trans-Tasman visa arrangements, 72, 73 North America, 58 foreign direct investment, 59 Northern Australia

investment focus, 11 Joint Select Committee, 107, 108 White Paper, 8, 11, 63, 64, 72, 102 Northern Australia: Emerging opportunities in an

advanced economy report, 64 Northern Australia Investment Forum, 11, 63, 64, 100 NSW Trade & Investment, 60, 108, 245

O occupational health and safety. see work health and safety Office of Legal Services Coordination, 162, 163 online services, 38, 109 ‘open for business’ message, 61 Organisation for Economic Co-operation and

Development (OECD), 37, 76, 142-3 Global Forum on Tourism Statistics in Japan, 75 Working Party on Bribery Phase III report, 142-3 organisational structure, 6 Outcome 1

Programme 1.1: Promotion of Australia’s export and other international economic interests deliverables, 19-27 highlights, 18 objective, 17 performance indicators, 27-31

Programme 1.2: Programmes to promote Australia’s export and other international economic interests, 113 deliverables, 113, 114 objective and highlights, 113 performance indicators, 113, 115 Outcome 2

Programme 2.1: Consular and Passport Services deliverables, 128 objective and highlights, 127 performance indicators, 127, 129 outcomes and programmes reporting framework, 16 outlook 2015-16, 10-12 overseas assignments, 10, 156 Overseas-Engaged Employees’ Scholarships, 155 Overseas Property Office (DFAT), 161

P Papua New Guinea (PNG), 106 parliamentary inquiries and briefings, 107-8 Parliamentary Secretary to the Minister for Trade and

Investment, 3, 40, 104, 107, 109, 110 Parliamentary Workflow System, 167 partnerships, 99 passport services, 131 performance agreements, staff, 140 performance framework, 140, 156

277 Index

perf

ormance reporting, 16 Peru, 97, 98 Philippines, 73, 89, 106, 155 Pivot North Inquiry into the Development of Northern

Australia: Final Report, 107 PMD International Pty Ltd, 125 Policy, Research, Equipment, Technology, Skills and

Services (PRETSS) framework, 32, 36 Portfolio Budget Statements 2014-15, 113, 127, 140 Premium Investor Visa (PIV) programme, 8, 11, 103, 141,

162, 167

PricewaterhouseCoopers, 143 privacy, 145 Privacy Act 1988, 145 Privacy Commissioner, 247 procurement, 163-4 Productivity Commission, 76 property management, 161 Protective Security Policy Framework, 162 Public Governance, Performance and Accountability

Act 2013, 3, 134, 141, 143, 163 Public Governance, Performance and Accountability Rule 2014, 142 Public Interest Disclosure Act 2013, 144, 162 Public sector audit committees: Independent

surance and advice for accountable authorities, 137 Public sector audit committees: Independent

assurance and advice for chief executives and boards, 144 Public sector financial statements: High-quality r

eporting through good governance and processes, 144 Public sector governance: Strengthening performance through good governance, 134,

137, 142, 143, 144 Public Service Act 1999, 3, 134, 143, 146 publications, 109 purchasing, 163

R Ralston, Kelly 92 RayGen Resources, 44 Reconciliation Action Plan, 158 RecruitAbility, 152

recruitment activity, 152 Regional Tourism Infrastructure and Innovation Fund, 77 Reid Fruits, 94 Relationship Management System, 165 renewable energy technology, 44 reporting framework, 16 resources and energy

foreign direct investment, 57, 59, 62, 63, 65 markets, 32, 37, 83, 84, 97, 98 Responding to Growth, roadshow, 55 responsibilities, 8 Rethink tax: Better tax, better Australia, 102 revenue, 13 risk management, 141-3 role, 2

S SAGE Automation, 123 Salini Impregilo, 61 Saudi Arabia, 56, 98, 105 scholarships, 45, 47, 155. see also Beryl Wilson

Austrade Scholarship for Women in International Business security, 162 Senate Economics References Committee, 108 Senior Executive Service (SES) remuneration, 146-7 senior investment specialists, 7, 60, 65-7 Senior Officials Trade and Investment Group, 99, 103 Sentance, Bryce, 159 service charter, 246-7 service exports, 34 Service Improvement Study, 2014-15, 3, 7, 27, 28, 41-2, 115, 116 services markets, 33 short-term overseas assignments, 156 Significant Investor Visa (SIV) programme, 8, 11, 101, 103, 141, 162, 167 Singapore, 37, 40, 64, 69, 73, 89, 90, 104, 110, 121 Singapore-Australia Joint Ministerial Council, 104 Skilled Occupations List, 77 small and medium-sized enterprises (SMEs), 164 SmartGate, 73 social media, 53, 109, 110, 111

Software, Workstation and Portability Programme (SWAPP2015), 166, 168, 253 solar technology, 44 South Australian Department of State Development,

108

sport. see Match Australia programme staff assistance programme, 160 awards, 156-7

communications, 140-1 Indigenous, 158-9 leadership programme, 154 numbers, 3 overseas-engaged, 146, 148, 154, 155 overview, 3 people with disability, 157-8 performance agreements, 140 recognition, 156 statistical profile, 148-52 surveys, 145 training and development, 141, 152-4, 157, 160, 163 turnover, 3 wellbeing, 160 workplace diversity, 157, 158, 159 state and territory directors, 45 State International Education Marketing Forum, 100 State of the Industry 2014 (tourism), 80 State of the Service report, 157 State Tourism Satellite Accounts 2013-14, 80 ‘Stay in Touch’ programme, 141 Strategic Centre for Leadership, Learning and

Development, 153 Study in Australia website, 10, 50, 52, 53 Survey of Australian Government Payments to Small

Business, 164 Survey of Tourist Accommodation, 2014-15, 75 Switzerland, 12, 73, 161

T T-QUAL Grants Programme, 77 TAFE Directors Australia, 56 Taiwan, 73 Takeda, 64 Tasmanian Department of State Growth, 108 Tasmanian Regional Tourism Package, 77

tax exemptions, 38 10-year multiple entry visitor visa (Chinese nationals), 8, 11, 72 Thailand, 64, 89, 90 Torres Strait Islander peoples. see Aboriginal and

Torres Strait Islander peoples tourism. see also T-QUAL Grants Programme air transport, 73 Austrade’s role, 68, 78

China foreign direct investment, 74 visitors from, 68, 80, 82, 87

employment, 76 expenditure by tourists, 68 grants programmes, 77 infrastructure, 8, 59, 63, 70, 71 investment in, 70-1

foreign direct investment, 73-4, 79 labour force survey, 77 outlook, 11 passport control, 73 productivity review, 76 promotional events, 75, 78 reports, 81 re

search, 68, 78-9, 80, 82 surveys, 75 visa changes, 72, 76-7 visitor statistics, 68-70 visitor survey reports, 78, 79, 80 Tourism 2020 strategy, 8, 68, 70-2, 73, 75, 76, 77, 78,

100

Implementation Plan (2015-2020), 72, 75, 101 Tourism and Transport Forum, 75, 101 Tourism Australia, 68, 70, 73, 74, 75, 79, 84, 85, 101, 111 Tourism Demand-Driver Infrastructure (TDDI)

programme, 75, 77 tourism employment plans (TEPs), 76 Tourism Forecasts: Autumn 2014, 80 Tourism Industry Potential, 2020, 78, 80, 101 Tourism Industry Regional Development Fund (TIRF)

grants programme, 77 tourism infrastructure foreign direct investment, 59, 63, 73-4 Tourism Investment Monitor 2015, 80 Tourism Major Project Facilitation service, 74 Tourism Ministers’ Meeting, 72, 75, 100

278 Australian Trade Commission Annual Report 2014-15

279 Index

ourism Regional Profiles 2013-14 , 80 Tourism Research Australia (TRA), 68, 78-9, 80 trade and investment ministers’ meetings, 99 Trade Commissioner Development Programme, 10,

153

trade development schemes. see Export Market Development Grants (EMDG) scheme TradeStart network Adviser, Melbourne, 41

locations, 244-5 partners, 244 programme, 2, 40-1, 88, 162 Trans-Pacific Partnership Agreement, 64 trans-Tasman visa arrangements, 72 Transition to Work disability employment programme,

157

U United Arab Emirates, 43, 105 United Kingdom, 58, 69, 73, 121 United Nations Women’s Empowerment Principles,

159

United States, 35, 49, 58, 69, 73, 92-3, 121 University of Melbourne, 46, 47 University of Sydney, 10, 48 University of Tasmania, School of Medicine, 97 University of Western Australia, 97

V values, 141, 156 Victoria University, 86 Victorian Department of Economic Development,

Jobs, Transport and Resources, 108 Vietnam, 45, 54, 89, 90-1 Vietnam Commerce University, 54 visas

investor programmes, 8, 11, 101, 103, 141, 162, 167 reforms, 8, 11, 72, 76-7 trans-Tasman arrangements, 72 visits, foreign government representatives, 43, 106-7

W Wales, Karen, 67 Wanda Group, 74 Watson, David, 66 web accessibility, 167 website, 38, 109. see also Study in Australia website Western Europe (incl. UK), 58, 59 WestSide Corporation, 87 White Paper on Developing Northern Australia: Our

North, Our Future, 8, 11, 63, 64, 72, 102 whole-of-government strategy foreign direct investment, 57, 74 state and territory directors, 45

state and territory governments, 62, 103 tourism, 78 Why ASEAN and why now? Insights for Australian business, 91

Why Australia—2015 Benchmark Report, 58, 110 wine industry, 96 Winning Investment in Australia training courses, 60, 153-4

women in Austrade, 159-60 executive decision-making, 137 UN empowerment principles, 159

Women, global trade and what it takes to succeed, 46 Women in Global Business (WIGB), 45-6 Woodside, 98 work health and safety, 131, 160, 248-9 Work Health and Safety Act 2011, 160, 248, 249 workforce planning, 148 working holiday visa reforms, 8, 11, 76, 77 Workplace Relations Committee, 146 workplace support, 160 world trade. see global value chains WorleyParsons, 98

Z Zurich office, 12, 161

280 Australian Trade Commission Annual Report 2014-15

Internal auditor

PricewaterhouseCoopers 28 Sydney Avenue Forrest ACT 2603

External auditor

Australian National Audit Office Centenary House 19 National Circuit Barton ACT 2600

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The report should be attributed as the Australian Trade Commission Annual Report 2014-15.

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ISSN: 1030-5904 (print)

ISSN: 2202-9354 (online)

This report is available at www.austrade.gov.au/ annualreport.

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All reporting is at 30 June 2015 unless otherwise specified.

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Austrade’s annual report team: Amanda Hughes and Tracey Hoffmann

We would like to thank everyone who contributed to this annual report at the various stages of the production process. Your assistance is greatly appreciated.

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Austrade locations

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Growth Markets Markets Markets

Adelaide Bandar Seri Begawan Auckland Abu Dhabi

Brisbane Bangkok Chicago Accra

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Hobart Guangzhou Houston Bogota

Melbourne Hanoi Istanbul Buenos Aires

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