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Australian Trade and Investment Commission annual performance statement

I, Stephanie Fahey, as the accountable authority of the Australian Trade and Investment Commission, present the agency’s 2017–18 annual performance statement, as required under paragraph 39(1) (a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). In my opinion, based on advice from Austrade management and Austrade’s Audit and Risk Committee, Austrade’s annual performance statement accurately reflects the performance of the agency and complies with subsection 39(2) of the PGPA Act.

Stephanie Fahey signature

Dr Stephanie Fahey Chief Executive Officer

Approach

The performance criteria that Austrade reports against are contained in its Corporate Plan 2017–18 and Portfolio Budget Statements 2017–18. The relationship between the corporate plan, portfolio budget statements and the annual performance statement is shown in Figure 7 on page 18.

The performance criteria in this annual performance statement have been organised according to the five purposes set out in Austrade's corporate plan:

  • Purpose 1: Develop international markets (pages 20–23)
  • Purpose 2: Promote international education (pages 23–24)
  • Purpose 3: Win productive foreign direct investment (pages 25–27)
  • Purpose 4: Strengthen Australia's tourism industry (pages 27–29)
  • Purpose 5: Help Australians with consular and passport services (pages 29–30).

Where performance forecasts exist for 2017–18, a symbol against each criterion in the statement shows the extent to which Austrade has met those forecasts. Performance forecasts for 2017–18 appeared in Austrade’s Portfolio Budget Statements (PBS) 2017–18.

Purpose 1: Develop international markets

Performance criteria and results: Purpose 1

Program 1.1: Promotion of Australia's export and other international economic interests

Satisfaction

High level of satisfaction for ministers, Australian business community, institutions and key partners with Austrade's services

Result 70% forecast, 89% actual

Source of criterion: PBS 2017–18 , Program 1.1 (Table 2.1.3)

Criterion met. Austrade conducts its independent Service Improvement Study to assess the agency's service delivery and to identify areas of improvement in its services to businesses and institutions. This study surveys Austrade's clients, based on their recent engagement with the agency.

See page 57

In 2017–18, the Service Improvement Study found 89 per cent of Austrade’s clients (across exporters, international education and tourism organisations) were satisfied with their dealings with the agency during the past 12 months. This result is identical to the previous year’s figure, and slightly above the 87 per cent achieved in 2015–16. These sustained high levels of satisfaction demonstrate the strong client service culture that exists within Austrade, reinforced by the fact that 85 per cent of all respondents reported achieving a commercial outcome within 12 months of working with Austrade (compared to 87 per cent in 2016–17, and 71 per cent in 2015–16). The survey also showed 76  per cent of clients rated Austrade’s paid services as representing good value for money. With the 2016–17 figure of 80 per cent, and the 2015–16 figure of 82 per cent, this also shows that high standards have been maintained, and are above the forecast of 70 per cent set out in the PBS 2017–18.

During 2017–18, Austrade coordinated four minister-led business missions—including a significant Australia Week promotion in India in August–September 2017. This brings the total number of minister-led business missions organised by Austrade since March 2014 to 39. Mission participants also provided positive feedback—98 per cent of respondents who participated in Australia Business Week in India (ABWI) said it had delivered an advantage to their organisation, and 72 per cent said that most or all of their objectives for participating in ABWI had been met. Furthermore, 64 per cent indicated that they achieved or expected to achieve a new business relationship in the subsequent three months. The Minister for Trade, Tourism and Investment also indicated a high level of satisfaction with Austrade’s comprehensive minister-led business missions program.

See page 66

The sustained high levels of satisfaction with Austrade—both generally and on business missions—demonstrate the agency’s success at achieving this criterion.

Develop international markets

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

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 1)

Criterion met. In 2017–18, Austrade’s Service Improvement Study found 75 per cent of Australian exporting businesses indicated Austrade made a positive contribution to their international business activities, slightly below the 2016–17 figure of 76 per cent and the same as the 2015–16 figure, but below the 2014–15 figure of 78 per cent. Austrade provides information and advice on export markets and helps its clients navigate complexities in international business. The sustained high levels of satisfaction recorded for this measure demonstrate Austrade’s services are relevant to its clients.

See page 58

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

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 1)

Criterion met. In 2017–18, Austrade’s Service Improvement Study found 84 per cent of Australian businesses (trade respondents only) indicated they achieved some form of commercial outcome within 12 months of working with Austrade, compared to 85 per cent in 2016–17, 68 per cent in 2015–16 and 75 per cent in 2014–15. A key role for Austrade is connecting Australian business to international buyers, partners and agents. The sustained high levels of satisfaction recorded for this measure demonstrate Austrade’s success in helping its clients do business overseas.

See page 58

Performance criteria and results: Purpose 1

Program 1.2: Programs to promote Australia's export and other international economic interests

Free trade agreement (FTA) promotion

Proportion of seminar and roadshow attendees reporting an increased understanding of how to use and benefit from FTAs

Result 85% forecast, 88% actual

Source of criterion: PBS 2017–18, program 1.2 (Table 2.1.3); Corporate Plan 2017–18 (Table 2)

Criterion met. In 2017–18, 88 per cent of respondents to seminar participant surveys reported an increase in understanding of how to use and benefit from FTAs as a result of attending the FTA seminars, compared to 90 per cent in 2016–17 and 89 per cent in 2015–16. The high level of increased understanding of how to use and benefit from the FTAs demonstrates Austrade’s success at achieving this criterion, and is above the 85 per cent forecast in the PBS 2017–18.

See page 80

Export Market Development Grants (EMDG) scheme

Proportion of EMDG scheme recipients reporting that the receipt of a grant encouraged them to increase their export promotion activities

Result 70% forecast, 71% actual

Source of criterion: PBS 2017–18, program 1.2 (Table 2.1.3); Corporate Plan 2017–18 (Table 2)

Criterion met. During 2017–18, 71 per cent of respondents reported the receipt of a grant encouraged them to increase their export promotion activities, compared to 73 per cent in 2016–17. This is a new measure for the EMDG scheme that more directly addresses the objectives of the scheme. The outcome is above the forecast of 70  per cent set out in the PBS 2017–18, showing this criterion has been achieved.

See page 72

Analysis of Purpose 1

Austrade has met or exceeded the forecasts set out in the PBS 2017–18, and has therefore achieved Purpose 1.

The results of Austrade’s Service Improvement Study have been sustained at a high level over three years. Austrade’s surveyed clients continue to value its services, with 89  per cent satisfied with their dealings with the agency during the last 12 months. Note that tourism organisations were included in the survey for the first time in 2017–18; results from this sector were consistent with the satisfaction levels reported by other sectors. Austrade’s surveyed clients (trade and education) also reported that Austrade made positive contributions to their international business activities, with 85 per cent of all respondents reporting they achieved a commercial outcome within 12 months of working with Austrade, down slightly from 87 per cent in the previous year, and 71 per cent in 2015–16. Note that this is distinct to the commercial outcome KPI on page 21, which covers trade clients only.

Collaborative efforts between state and territory governments, industry associations and other allies are imperative for Australia to be successful on the global stage. Austrade’s deep engagement with stakeholders throughout the year delivered aligned interests, greater coordination and cooperation, and helped the Australian Government to better understand Australian industry appetite, capacity and capability for international trade, including in emerging sectors.Collaborative efforts between state and territory governments, industry associations and other allies are imperative for Australia to be successful on the global stage. Austrade’s deep engagement with stakeholders throughout the year delivered aligned interests, greater coordination and cooperation, and helped the Australian Government to better understand Australian industry appetite, capacity and capability for international trade, including in emerging sectors.

The Export Market Development Grants (EMDG) scheme survey found recipients’ level of engagement with the scheme was positive, with 90 per cent of respondents rating their engagement with the scheme as either good, very good or extremely good (compared to 93 per cent in 2016–17 and 91 per cent in 2015–16). Ninety-five per cent of respondents indicated the scheme enabled their organisation to become a more sustainable exporter, including through helping them expand into international markets, grow their international revenue, establish an international presence, or reinvest in their business. Austrade introduced a new key performance indicator for the 2016–17 reporting year, measuring the number of participants reporting that the receipt of a grant encouraged them to increase export promotion activities. This measure better reflects the policy intent of the scheme: encouraging businesses to grasp the benefits of overseas promotional expenditure. It is important to note that the EMDG scheme reimburses past expenditure; this measure is a gauge of those businesses’ propensity to spend money on export promotion in the future.

The delivery of 22 Free Trade Agreement (FTA) seminars by Austrade in 2017–18, to a total audience of over 750 business representatives, was an important part of Austrade’s FTA promotion strategy. It helped businesses better understand the benefits of Australia’s FTAs with Korea, Japan and China, with 88 per cent reporting an increase in awareness of FTAs. In 2017–18, the seminar program covered opportunities created by the existing North Asia FTAs, as well as anticipated benefits from the newly signed Peru–Australia Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11). As the program has matured, the familiarity of the attendees with the program has also grown. Accordingly, the presentations have evolved to provide more in-depth information to more knowledgeable audiences. Among seminar attendees who claimed their awareness of FTAs increased in 2017–18, more than 90 per cent said their seminar objectives were all or mostly met. These results reinforce the value of the seminars’ key objectives—to increase awareness and knowledge of the FTAs.

Purpose 2: Promote international education

Performance criteria and results: Purpose 2

Program 1.1: Promotion of Australia's export and other international economic interests

Promote international education

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

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 2)

Criterion met. In 2017–18, a follow-up survey to Austrade’s Service Improvement Study found 86 per cent of Australian education institutions indicated Austrade made a positive contribution to their international business activities, compared to 81 per cent in both 2016–17 and 2015–16, and 88 per cent in 2014–15. Austrade directly supports the sector through regular market intelligence and opportunities, as well as international events and promotions. The sustained high level of satisfaction demonstrates Austrade’s success at achieving this purpose.

See page 87

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

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 2)

Criterion met. In 2017–18, a follow-up survey to Austrade’s Service Improvement Study found 86 per cent of Australian education institutions indicated they achieved some form of commercial outcome within 12 months of working with Austrade, compared to 91 per cent in 2016–17, 82 per cent in 2015–16 and 87 per cent in 2014–15. Commercial outcomes range from new international student enrolments to forging new international partnerships. This high level of satisfaction demonstrates Austrade’s success at achieving this purpose.

See page 87

Analysis of Purpose 2

The sustained high levels of satisfaction among Austrade's education clients demonstrate Austrade's success at achieving its purpose of promoting international education. In particular, the survey results show Austrade's activities directly contributed to clients' international business activities and allowed them to achieve commercial outcomes. This is evidence of the impact of Austrade's work in promoting international education.

International education activity in 2017 contributed $30.3 billion to the economy, a 35 per cent increase on earnings recorded in 2016. Australian International Education 2025 (AIE2025) is a long-term market development roadmap, developed together with the sector to enable long-term sustainable growth, and in 2017–18, Austrade led on a range of projects that supported AIE2025’s themes. Austrade co-hosted a series of ‘Deep Dives’, which explored collaboration in higher education and higher learning. Austrade also released a new online advisory tool for clients, providing them with insights on market opportunities and trends that might be relevant to their businesses. Also during 2017–18, Austrade led the development of a strategic messaging framework that will enable consistent national marketing messages for Australia’s education and research strengths.

The data used for assessing Austrade’s performance in this sector is derived from a follow-up survey to the Service Improvement Study. The sustained levels of satisfaction across multiple years, coupled with the increase in economic contribution from international education, point to Austrade’s success at achieving its purpose in promoting international education.

Purpose 3: Win productive foreign direct investment

Performance criteria and results: Purpose 3

Program 1.1: Promotion of Australia's export and other international economic interests

Win productive foreign direct investment (FDI)

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

The number of investment outcomes facilitated, measured in terms of investment value, jobs created/retained and anticipated annual exports(a)

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 3)

Criterion met. In 2017–18, Austrade facilitated 113 investment outcomes. This represented an increase of almost 23 per cent from 2016–17, when there were 92 outcomes. It is also an increase on the 81 inward investments achieved in both 2015–16 and 2014–15. The sustained level of investment outcomes demonstrates Austrade’s contribution in achieving this criterion.

Total recorded investment value for 2017–18 was almost $4.8 billion, the same investment value as in 2016–17, and an increase from the 2015–16 figure of $3.2 billion. The result in 2017–18 was boosted by several high-value resources and energy, and agribusiness and food projects. The timing of large projects can have a major impact on the final outcome for the year in which the investment value is recorded. With high levels of investment value recorded over 2017–18, this underlines Austrade’s contribution in achieving this criterion.

In 2017–18, there were an estimated 27,588 jobs created or retained as a result of investment outcomes facilitated. This represents a substantial increase on the 2016–17 figure of 3,738 and the 2015–16 jobs figure of 1,853.

In 2017–18, $333 million in annual exports are anticipated from investment outcomes facilitated. This is a significant increase on the 2016–17 figure of $1 million and on the 2015–16 figure of almost $69 million. As with all of the investment measures, this relies on investors’ voluntary reporting of statistics. In this instance, the percentage of investors reporting on this measure is particularly low (2.7 per cent in 2017–18, 1 per cent in 2016–17 and 4.9 per cent in 2015–16). The figure is also a function of the type of investments attracted and the degree to which they are directly linked to potential exports. While the potential to drive exports is one measure of the strategic value of FDI, it is not directly related to all FDI projects. This year’s results included a number of key strategic infrastructure projects and investments in innovation and technology, which add significant value to Australia but may not, in the first instance, be direct drivers of exports.

See page 95

Austrade-specific measures

The number of significant engagements with agreed investor targets (onshore and offshore), including reinvestment and aftercare

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 3)

There were 100 engagements with agreed investor targets in 2017–18, including in the areas of reinvestment and aftercare. This was a new measure for 2017–18.

See page 96

The number of priority milestones, information, project and visitation requests, and stakeholder introductions generated from potential investors

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 3)

Criterion met. There was a total of 490 information requests, project requests, visitation requests and stakeholder introductions in 2017–18, which is an increase of 20 per cent on the total of 407 in 2016–17, and is also an increase on 323 in 2015–16 and 312 in 2014–15. The sustained demand for Austrade’s services over four years demonstrates the attractiveness of Austrade’s service offering.

Austrade also records priority milestones to recognise the length of time required for investment decisions to come to fruition and the changing nature of investment. During 2017–18, Austrade recorded 31 priority milestones, down from 52 the previous financial year.

See page 96

Analysis of Purpose 3

The sustained high numbers of foreign investment outcomes facilitated show Austrade’s success in achieving its purpose of winning productive foreign direct investment (FDI).

The number of investment outcomes facilitated by Austrade in 2017–18 rose to 113, above the previous three years’ results. The value of investment facilitated ($4.8 billion) was similar to the 2016–17 results. Similarly, the jobs and exports figures were up from the previous two years’ results. While the number of priority milestones recorded in 2017–18 was below the number recorded in 2016–17, it is worth noting that the definition for priority milestones was tightened in July 2017 to exclude the signing of non-disclosure agreements. This resulted in a lower 2017–18 outcome than would otherwise have been the case.

There are a number of factors to keep in mind when looking at the number and value of investment outcomes. First, Austrade does not seek to touch all FDI into Australia. It focuses its efforts on productive FDI in areas where the benefit to Australia is greatest and where there is a role for government. Second, investment flows by their nature will vary significantly from year to year. One or two significant projects, particularly in the infrastructure and resources and energy sectors, can have a major impact on total values and/or jobs and exports. Finally, Austrade relies on publicly available information and investors’ voluntary reporting of information to arrive at investment value, jobs and anticipated export figures. Response rates can vary significantly, meaning that changes to the underlying figures can be amplified.

Cross-border investment is changing globally. Competition continues to intensify and changes in the geopolitical environment are challenging globalisation and trade and investment liberalisation. Traditional source markets are becoming strong competitors for limited investment dollars, and emerging non-traditional investors from developing economies create a new dynamic in investment promotion and attraction. These factors, combined with the continuing transition underway in Australia’s economy following the mining investment boom, create an increasingly challenging environment for the promotion and attraction of productive foreign direct investment into Australia.

Austrade continues to refocus its activities to accommodate the global and national changes in FDI, which is still transitioning from capital-intensive resource investments following the mining investment boom to more capital-light growth in the services industry.

Purpose 4: Strengthen Australia's tourism industry

Performance criteria and results: Purpose 4

Program 1.1: Promotion of Australia's export and other international economic interests

Strengthen Australia's tourism industry

Double overnight visitor expenditure to between $115 billion and $140 billion by 2020

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 4)

Expenditure is still on target to exceed the $115 billion lower-bound threshold of the Tourism 2020 growth targets. Total overnight visitor expenditure reached $107.4 billion in the 12 months to March 2018, having grown by 5.7 per cent from the same period in the previous year. This growth was consistent with the increase recorded in the preceding 12-month period: total overnight visitor expenditure grew by 5.8 per cent from $96.0 billion in the 12 months to March 2016 to $101.6 billion in the 12-month period to March 2017. Expenditure grew by 7.1 per cent from $89.6 billion in the 12 months to March 2015 to $96.0 billion in the 12-month period to March 2016. The continued strong performance of overnight visitor expenditure in Australia over four years underscores Austrade’s contribution to achieving this criterion.

Note that Austrade is unable to provide figures to June 2018 because of issues with international arrivals data used for producing the survey results—see analysis on page 28 for details.

See page 106

Priorities and outputs outlined in the Tourism 2020 Implementation Plan (2015–2020) progressed in accordance with agreed timeframes

Result
Criterion met

Source of criterion: Corporate Plan 2017–18 (Table 4)

Criterion met. During 2017–18, the Tourism 2020 target of 20,000 new rooms in 10 major markets (eight capital cities, Gold Coast and Cairns) was exceeded. Austrade was responsible for key actions outlined in the Tourism 2020 Implementation Plan (2015– 2020), overseen by tourism ministers through the Australian Standing Committee on Tourism. Austrade reviewed the progress against the plan, which includes cross-portfolio collaboration, visa arrangements, aviation capacity, labour and skills, and investment. Outcomes included the continued rollout of multiple-entry visitor visas and online visa lodgement; contribution to the successful negotiation of new or updated air services arrangements with India; collaboration between industry and government to address labour and skills issues; and efforts to integrate national and state tourism plans into regional development and local government planning.

The suite of activities Austrade has undertaken in this area shows that Austrade has progressed the priorities and outputs of the Tourism 2020 Implementation Plan.

See page 107

Analysis of Purpose 4

The sustained growth of total overnight visitor expenditure shows that Austrade has achieved its purpose of strengthening Australia’s tourism industry. Current Tourism Research Australia forecasts suggest that nominal overnight tourism spend is expected to reach approximately $131 billion by 2020, surpassing the Tourism 2020 lower-bound target of $115 billion.

AAustrade is not yet able to provide total visitor expenditure to June 2018 because the release of the full International Visitor Survey results was delayed. This is because there were some concerns with the data on the characteristics of international arrivals collected by the Department of Home Affairs and used in the International Visitor Survey. At the time of publication, work was in progress to resolve these issues.

Austrade contributes to the strengthening of Australia’s tourism industry via its role in policy development. As the impact of tourism policy on final tourism outcomes is indirect, Austrade uses its key performance indicators as proxies to show its performance in achieving this purpose. The top-line measure of overnight visitor expenditure in Australia is a demonstration of the success of the tourism industry as a whole. Austrade acknowledges that its contributions to that success are indirect; however, policy settings are an important component in ensuring the success of a business that is driven by international and domestic travel. For example, new air services arrangements (see below) will help towards achieving the Tourism 2020 upper-bound target of $140 billion in overnight visitor expenditure by 2020.

Austrade continues to focus on developing and advocating for policy reform to enable the Tourism 2020 upper-bound growth targets to be attained. The sustained increase in overnight visitor expenditure results shows this work is on track to reach the targets set by the Government in the 2020 Tourism Industry Potential growth scenario. The progress on this important measure underlines the strength of Australia’s tourism industry.

Examples of Austrade’s policy development and advocacy include participation in the Australian Government delegation responsible for air services negotiations with India. Outcomes from these negotiations in 2017–18 included the negotiation of unlimited passenger services to six destinations in India (Mumbai, New Delhi, Kolkata, Chennai, Hyderabad and Bangalore) from any point in Australia, and unlimited services to six destinations in Australia (Brisbane, Sydney, Melbourne, Adelaide, Perth and another destination to be determined by India) from any point in India.

Austrade also engaged with the Department of Home Affairs on significant technology-based enhancements to Australian visitor visa and passenger facilitation products, including the complete rollout of online lodgement for visitor visas for all markets, and commencement of trials of secondgeneration ‘contactless’ SmartGate technology.

Asian markets continue to drive growth in international tourism, with China overtaking New Zealand in February 2018 as the main source of visitors to Australia.

Purpose 5: Help Australians with consular and passport services

Performance criteria and results: Purpose 5

Program 2.1: Consular and passport services

In accordance with the Department of Foreign Affairs and Trade Consular Services Charter and Australian Passport Office Client Service Charter:

Timely and effective delivery of consular and passport services to Australians overseas

Result
Criterion met

Source of criterion: PBS 2017–18, program 2.1; Corporate Plan 2017–18 (Table 6)

Criterion met. In 2017–18, 98.8 per cent of the 15,576 passport applications received at Austrade offices were scanned within 24 hours. This result is well within the 3 per cent tolerance benchmark set by the Australian Passport Office, and is slightly higher than the 98.5 per cent achieved in 2016–17 and the 98.4 per cent achieved in 2015–16. The number of passport applications received fell by 6.0 per cent in 2017–18 compared to 2016–17.

The number of passport applications received grew by over 12 per cent in 2016–17 compared to 2015–16.

Austrade received 1,158 applications in 2017–18 for emergency travel documents overseas. This represented a fall of 2.4 per cent from the 1,186 applications received in 2016–17, but an increase on the 1,121 applications received in 2015–16. All urgent passport issues were dealt with in a timely and responsive manner.

A total of 7,017 recorded notarial services were delivered in person and at the time when complete and correct documentation was lodged, compared to 7,996 in 2016–17. This is a reduction of 12.2 per cent.

See page 119

Analysis of Purpose 5

Austrade delivers consular and passport services on behalf of the Australian Government in particular locations where it is represented. Austrade’s primary responsibility in the process of issuing a passport is the reviewing, accepting and scanning of passport applications. From that point, the application transfers to the Australian Passport Office, which is responsible for the printing and issuing of the book. The high proportion of applications (98.8 per cent) that were scanned within 24 hours of receipt points to Austrade’s timely and effective delivery of the component of passport services that lies within Austrade’s control. The Australian Passport Office has noted that Austrade posts are all currently performing well against key performance indicators.

Austrade consular posts performed well throughout the year and have met their obligations under the memorandum of understanding between the Department of Foreign Affairs and Trade (DFAT) and Austrade.

Consular (including notarial) services are by their nature unpredictable, and it is not possible to apply in-depth analysis to these services, short of noting DFAT’s satisfaction with Austrade’s services. DFAT’s feedback highlighted particular achievements, including professional management of a sensitive consular case, and efforts undertaken to improve service delivery and crisis management knowledge. This feedback again underlines Austrade’s effectiveness in providing timely and effective consular services.

In September 2017, responsibility for consular matters in Istanbul transferred to DFAT. As such, statistics for consular services provided by the Istanbul post to September 2017 have been included in the full-year result.

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