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Foreign Affairs, Defence and Trade Legislation Committee
25/10/2018
Estimates
FOREIGN AFFAIRS AND TRADE PORTFOLIO
Australian Trade and Investment Commission

Australian Trade and Investment Commission

[20:41]

CHAIR: While the guard is changing, I note that the minister is now here in her capacity representing the Minister for Trade, Tourism and Investment.

Senator Payne: Yes, Senator, yes.

CHAIR: I welcome Dr Fahey as the chief executive officer of Austrade, and all the other officials. Who can tell me about Iran? I was starting to ask questions. If I may, I will quickly kick off and then hand over to Labor. Mr Beresford, what are our Austrade officials in Tehran currently working on? You've had prior notice of this question.

Mr Beresford : I did, Senator. Thanks for the question. In Tehran and in Iran more generally, education remains a very important sector to Australia. Universities often talk about the importance of getting cultural diversity into the universities.

CHAIR: So it's education that they're mainly working on?

Mr Beresford : Education is a very significant sector.

CHAIR: That would be what, more in the service area? What about products?

Mr Beresford : Yes. Just to give you orders of magnitude, the level of services and merchandise we export to Iran is about $340 million a year. Just over $190 million of that is in education. So that gives you, Senator, a good sense of the size of the prize.

CHAIR: Thank you for that, that does.

Mr Beresford : Beyond that, food and agri remains an important sector as well. They'd be the two dominant. Then you really drop down to health care.

CHAIR: Alright. Thank you for that. How much does it cost the taxpayer to keep an Austrade presence in Tehran? If you don't know the exact figure, take it on notice.

Mr Beresford : I'll have to take that on notice.

CHAIR: I think that covers me. Senator Gallacher, it's all yours.

Senator GALLACHER: A lot of the brief that I have here goes straight to amounts of expenditure and contracts. So if someone with a financial area of expertise comes up, that would be good. We're looking at brand Australia and we want to find out what progress has been made on the development of brand Australia. Where are we up to?

Ms Ralston : The work around establishing and designing a new nation brand was announced in late 2017 in December. So the work throughout the course of this year has been about undertaking market research, undertaking industry consultations and starting to work on the creative elements.

Senator GALLACHER: Okay. When will it be launched?

Ms Ralston : It's still in the design stage and in creative. There have yet to be decisions taken about that, so it's difficult to say at this stage.

Senator GALLACHER: Is there an early plan of when you anticipate conclusion? Or is it just open-ended?

Ms Ralston : There's still a range of consultations underway, and there will be a decision process through government processes. So, no, I couldn't anticipate at this stage.

Senator GALLACHER: How many people have been consulted on brand Australia?

Ms Ralston : We have a number of consultation mechanisms running. There are a series of formal committees established. There is a nation brand advisory council established, which has eminent Australian business leaders and leaders from across a range of elements of the community. We have a brand experts council set up, which is a range of marketing and branding experts.

Senator GALLACHER: That's not really my question. How many people have been consulted?

Ms Ralston : It's hard to say exactly. We ran some industry consultations around the country in all the states and territories in, I think, around June-July, and about 350 people participated in those consultations. There have been about 1,500 people involved in various other forums and conversations. There is a newsletter that we send out that goes to about 1,500 people.

Senator GALLACHER: Excellent.

Ms Ralston : It's open consultation. There was a digital platform as well, which was running. It was very wide consultation.

Senator GALLACHER: Presumably someone who knows something of branding would be able to put those figures into perspective? That's a normal range of people to consult.

Ms Ralston : I should mention too, of course, that the other part of that is international market research. We'll do it at the right time. We're commencing it very shortly, with some of the concepts we're developing. It will be subject to international market testing, so that's key audiences for the nation brand and, of course, international audiences.

Senator GALLACHER: Will the final brand be signed off by cabinet?

Ms Ralston : It's a process of decision through government, yes.

Senator GALLACHER: So it will go to cabinet and get a tick-off. Thank you. How much money has been spent on developing brand Australia?

Ms Ralston : Around $10 million was allocated to the project over three years. I think it's about a million dollars to this point. I couldn't be absolutely certain, but it has largely been around the research and other consultations processes.

Senator GALLACHER: How much goes to external contractors, or does all of it go to contractors?

Ms Ralston : I would have to take that on notice. There is a component for some external contracts—the experts in market research. There are some components for own operating costs for that as well, and then providing the various forums around the various states and territories had hire costs around venues, et cetera. So I would have to take that on notice.

Senator GALLACHER: So someone very diligently has got a couple of AusTender quotes out, and one was for $24,365. The other one was for $343,000. Does anybody have any knowledge of particularly the $340,000 Austrade market research, contract period 21 May 2018 to 31 August 2018?

Ms Ralston : That was for the market research and conducting the consultations around the states and territories.

Senator GALLACHER: So that's covering this off 350 and 1,500—

Ms Ralston : The 350, plus the digital platform.

Senator GALLACHER: Thank you for that. We will now go to staff. How many FTEs does Austrade currently have?

Mr Nichles : I refer to our annual report, which we've just published. There are 1,049 staff as at 30 June 2018.

CHAIR: 'When was it published?' is being asked by Senator Moore.

Mr Nichles : It was 22 October, I think; two days ago.

Senator GALLACHER: So it's 1,049 as of 30 June this year. Is that correct?

Mr Nichles : Yes.

Senator GALLACHER: How many FTEs did Austrade have two years ago?

Mr Nichles : I'll have to take that on notice. I don't have it in the annual report.

Senator GALLACHER: Do you have last year's?

Mr Nichles : It's 1,056.

Senator GALLACHER: That was one year ago, was it?

Mr Nichles : Sorry. Two years ago was 1,056 and last year was 1,095.

Senator GALLACHER: So that's just normal attrition, is it? Or have there been any programs changed? Or is that just the normal up and down flow?

Mr Nichles : Yes, it's a normal up and down flow. We run about an 11 per cent turnover of staff each year.

Senator GALLACHER: Could you break down your staffing levels into SES bands?

Mr Nichles : Yes. Of the 1,049 that I mentioned, 62 are SES.

Senator GALLACHER: What have you spent on recruiting since January 2017?

Mr Nichles : I would have to take that specific question on notice.

Senator GALLACHER: I've got a contract here which says you spent $153,000 on temporary personnel services. What does that mean? Does that mean labour hire or something?

Mr Nichles : It could be contractors. They could be short-term staff. Approximately three per cent of our staff are contractors.

Senator GALLACHER: I've got another contract here that says you spent $227,000 on temporary personnel services dated 27 August. So there are regular contracts appearing on AusTender for temporary personnel services. Could you explain that? You've got your fixed FTE component. You're saying that's natural attrition, which is fair enough. Why is there such a high level of temporary personnel services? Do you get a contract worker from an agency like Hays or something like that? Is that what I'm looking at here?

Mr Nichles : Yes, if they're temporary staff. The $240,000 as a proportion of our total salary bill is quite small.

Senator GALLACHER: What I'm looking at are quite a number of temporary service contracts for $11,000, $49,000, $150,000, $17,000, $50,000, $227,000 twice and $153,000. Are they for individual people? These are AusTender tenders for personal services. Is each one for multiple people or one person?

Mr Hazlehurst : Without having those in front of us with an ability to actually go into the detail, they could be any number of things.

Senator GALLACHER: I'll tell you what they are. It says 4 June to 20 September 2018 $11,000. So clearly that's a contract period, and it would probably be one person. Is that right?

Mr Hazlehurst : Yes. But what I meant is that in some cases there is simply a temporary vacancy within the organisation and we're in the process of recruitment, so we've someone come in for a short period—

Senator GALLACHER: It's a dorothy dixer. As Senator O'Sullivan says, it's not an Agatha Christie. I just want to find out what's happened.

Mr Hazlehurst : I'm not trying to be difficult about it.

Senator GALLACHER: 1 July 2018 to 24 January 2019 $145,000. That is a contract position that opened up and you filled?

Mr Hazlehurst : Yes, Senator.

Senator GALLACHER: It sounds like that, doesn't it? That's fine.

Mr Hazlehurst : We're happy to provide the detail of those on notice. I don't have the detail of them in front of me, but it would be a variety of different—

Senator GALLACHER: We've made the point. On notice could you tell us how much you spent with recruitment companies since January 2017, and how much you've spent on temporary personnel services since January 2017?

Mr Hazlehurst : Certainly.

Senator GALLACHER: AusTender is a mighty big database and we probably haven't captured all of what you've done. Codes of conduct investigations: how many code of conduct investigations have you conducted in the last 12 months?

Mr Nichles : Two.

Senator GALLACHER: Were they Australian or overseas?

Mr Nichles : They were both Australian.

Senator GALLACHER: I can see a tender here for $27,000 for management advisory services. Is that a code of conduct amount?

Mr Nichles : If you gave me the name of the contractor I might be able to tell you. Just the amount doesn't give me enough information.

CHAIR: So you contract somebody to do the code of conduct?

Mr Nichles : Depending on the nature of the code of conduct, for the sake of clarity, objectivity and impartiality, we would use an external investigator.

Senator GALLACHER: Stopline Pty Ltd.

Mr Nichles : Stopline is an external investigator.

Senator GALLACHER: So they had $27,000 to look at a code of conduct case. That's basically what that is, isn't it?

Mr Nichles : Yes.

Senator GALLACHER: How many have you done? Two? Both in Australia?

Mr Nichles : Yes.

Senator GALLACHER: What's the total expenditure on this? I can see $27,000. Who's Clayton Utz? They got $38,000. ZRA Consultancy: they're another $30,000. Were they all code of conduct investigations? I have $38,000, $30,000, $68,000 and another $27,000, so that's about $95,000 on code of conduct investigations for two occasions.

Mr Nichles : We may use external investigators for code of conduct as well as public disclosure.

Senator GALLACHER: Perhaps you can give us the most expensive one, how much you spent on these investigations and with whom. Most importantly, what were the investigations in relation to?

Mr Nichles : I'm not able to share that with you.

Senator GALLACHER: Because they're not concluded? Because they're before the courts or you just don't want to tell me?

Mr Nichles : For reasons of privacy and confidentiality.

CHAIR: Are you able to assist the committee without naming names? Was it financial fraud?

Mr Nichles : Certainly, yes we can.

Senator GALLACHER: Going down the chair's line, what were the investigations in relation to? We're not interested in the location or the people. What were they in relation to?

Mr Nichles : Allegations of misconduct.

CHAIR: But what sort of misconduct? Was it bullying, financial impropriety, getting money on the sly to assist somebody with trade negotiations? What?

Mr Nichles : They were both related to bullying.

Senator GALLACHER: Have they been concluded?

Mr Nichles : Yes, they have.

Senator GALLACHER: Were the breaches upheld?

Mr Nichles : No. They were dismissed.

Senator GALLACHER: On notice could we have that expenditure? Jolly good. Export Awards: how many separate tenders were issued under the 56th Australian Export Awards?

Ms Ralston : I don't have the details of the various contracts with me, but I can certainly take that on notice. The major tender is for the event management company who actually runs the event around the annual Export Awards ceremony, which takes place at the end of November.

Senator GALLACHER: You will note that the very diligent preparers of these questions have got the AusTender events management at $35,00 and $178,000. Was the $178,000 the largest tender?

Ms Ralston : From memory, I think it was, but I'll check that and make sure we have the full information. It covers a range of aspects of the event—the event management, the actual hiring of venues, the catering, the entertainment elements. There are a large number of elements in that particular contract, so I'd have to have the details in front of me.

Senator GALLACHER: Would there have been more than two contracts in this events management space?

Ms Ralston : I don't think there are, but I'll have to check.

Senator GALLACHER: You can take that on notice to clarify. We've got two and you're going to take on notice whether there were any more. And you said the largest tender was the $178,000 to Events Management Group?

Ms Ralston : I will confirm that, but I think that's the case.

Senator GALLACHER: To the best of your knowledge. Where was the first event held, and what was the cost of the venue hire?

Ms Ralston : The Export Awards is a program of activity which cuts across the states and territories. AusTrade manages a national program, but each of the state and territory governments and sometimes the relevant chambers are involved in the running of the local events in each state and territory. We might participate in those; we might provide support and advice and the infrastructure around some of the elements, but we don't pay for all of the venues at all of the state locations. Most of the effort at our end goes towards the national awards process and the campaign of activity to promote and showcase the winners of the awards. Obviously, we are highlighting Australia's leading and successful exporters, and we use that as part of our marketing and promotional activity throughout the course of the year, so some of the expenditure items go to the full year of program.

Senator GALLACHER: These are quite detailed questions, so they may lend themselves to be taken on notice. Where was the event held? You've explained that it was held at multiple places. What was the cost of venue? You're saying you co-chair. How much money was spent on entertainment? Who was the entertainment? Did you have a headline act? How much was spent on catering and lighting? How much was spent in total on the awards?

Could you please provide a breakdown of all costs associated with the event, a list of food and beverages and, importantly, a list of all attendees? Presumably you've got all that in your back pocket.

Ms Ralston : Not exactly. The event will take place at the end of November. All the details will be settled after 27 November.

Senator GALLACHER: All right. Thank you.

How many tenders have Austrade had for legal advice outside the department? I take it we've covered a bit of that with the code of conduct investigations.

Mr Nichles : I will take that on notice. I might have the information here, but, for the sake of time, we'll take that on notice.

Senator GALLACHER: Okay. We've got DLA Piper. We've got quite a few.

CHAIR: Is Abetz Curtis amongst them?

Senator GALLACHER: No. It looks like you used a variety of legal firms.

Mr Nichles : We used eight.

Senator GALLACHER: Okay. And $80,000 is the largest contract that we can see. That was to Maddox? There are a number of $15,000 contracts to DLA Piper. What we're saying is we have this information and, just for completeness, how many tenders have you had for legal advice outside the department in the last 12 months? What was the most expensive tender? What do you commonly seek legal advice for?

Mr Nichles : It could be a range of matters. It could be around a public information disclosure. It could be around a lease. It could be around industrial relations. It could be where we are looking for certainty or we're looking for a second opinion not from our in-house legal team.

CHAIR: Are they all one-offs, or is there one type of activity—let's say leases—where you constantly use outsourced legal services?

Mr Nichles : We use a range of providers.

CHAIR: Yes, but what for? The question was: what's the main purpose of it? You indicated a range of services, and that's fine, but is it just a whole range of one-offs or is there one particular area that you do seek legal advice on on a regular basis?

Mr Tonkin : We generally go to specialist advisers on specialist matters.

CHAIR: And they're one-off?

Mr Tonkin : Yes.

Senator GALLACHER: So let's go specifically to that. The code of conduct is a one-off and you would get specific outside advice?

Mr Tonkin : For the code of conduct, it would be differentiating between the investigation and legal advice on that investigation, yes.

Senator GALLACHER: Okay. Is negotiating your enterprise bargaining agreement another area where you would go for outside advice?

Mr Nichles : No, we haven't sought any external legal advice on that.

Senator GALLACHER: Can we get what you have sought over the last 12 months? We have done some work and we know that you've done some stuff on AusTender, but, for completeness, if you could give us the full list of the last 12 months and the purpose for which you sought the legal advice, that would be excellent.

Mr Nichles : Certainly.

Senator GALLACHER: I go to another item of curiously entitled 'random spends'. Does Austrade have a subscription to LinkedIn?

Mr Nichles : Yes, we do.

Senator GALLACHER: Why? I've got one.

Mr Nichles : We primarily use it for recruitment purposes. We need a commercial agreement with them in order to promote our roles. We're a globally dispersed organisation. We are in 83 different markets and 49 different countries, so we see it as an excellent, cost-efficient way of advertising our vacancies.

Senator GALLACHER: It's not an insignificant sum, though. It's $91,000; is that correct? We're looking at AusTender human resource services. Is that LinkedIn?

Mr Nichles : As I said, we're a global organisation, so we're recruiting. We have 1,000 staff right across the world, so we see it as an excellent and very efficient way to recruit.

Senator GALLACHER: So LinkedIn is 90-odd thousand?

Mr Nichles : I don't have AusTender in front of me.

Senator GALLACHER: This says $91,000, doesn't it? Can you take on notice how much was spent on LinkedIn?

Mr Nichles : Yes.

Senator GALLACHER: And why does Austrade have a tender approved for not Dentsu Mitchell for LinkedIn, not LinkedIn directly? Is there an intermediary here?

Mr Nichles : Dentsu Mitchell used to be the federal government's master media buying agency, so any additional paid work that we would want to do for recruitment or any other type of non-campaign advertising would have to be placed through Dentsu Mitchell.

Senator GALLACHER: So it's possible that this could be services other than LinkedIn?

Mr Nichles : Absolutely.

Senator GALLACHER: Okay. Could you detail that for us, please, and advise us why those services couldn't have been produced in-house?

Mr Nichles : It's impossible to get efficiencies from media. It's also a federal government requirement that any expenditure goes through the master media agency.

Senator GALLACHER: Okay. So, on notice, if you could put that in writing, that would be fine.

Four Square Design Studio had $105,000. 'Australia lounge build for mining'—what are the services provided in this tender?

Mr Nichles : Often, when we do trade shows—for example we have a very big presence at Mining Indaba in South Africa each year, and Austrade hosts the Team Australia presence—we are required to build a lounge or trade presence, and we call it a lounge. There are Australian companies who are exhibiting, and we match Australian exporters with customers in that market, so it is there to build the trade show presence at those particular trade shows.

Senator GALLACHER: Okay. How many people would have come through this lounge?

Mr Nichles : I'd have to check which lounge that is. I'm assuming it is Mining Indaba, but I would have to confirm on notice.

Senator GALLACHER: It was 4 February to 7 February, so, this must be prospective. This is for next year, is it? You have let a tender out for 4 February 2019 to 7 February 2019?

Mr Nichles : Austrade manages a number of trade show presences around the world, so I would have to take that on notice.

Senator GALLACHER: If you have got those two dates, you will be able to match up the spend. How do you assess value for money in this area? What does it look like? Do you have a template that fits over it and says, 'Righto, Ms Fahey; close your eyes and sign off on that expenditure'? How do you put it up to the executive or whoever authorises it?

Mr Nichles : As I said, we have been doing this for a number of years and we do it around the world, so we've got a reasonably good benchmark. The costs are going to vary by markets. We can be in some low-cost markets, so building a trade show presence could be a smaller amount. If we're in high cost markets like the US, building it will cost more. But certainly we have benchmarks so we know whether or not we're getting value for money.

Senator GALLACHER: Okay. On notice, could you give us the analysis that's presented to the executive who signs off on this as value for money and any sort of publicity photos or success stories from it?

CHAIR: Happy snaps.

Senator GALLACHER: There is also a tender here for almost $13,000. It was $12,872 for presentation material. The publish date was 27 August. The contract period was 20 August to 18 to 20 September. The successful supplier was Proximity Advisory Services. What would all that be about?

Mr Nichles : I don't know the detail of that.

Senator GALLACHER: Can you take that on notice?

Mr Nichles : Yes.

Senator GALLACHER: What was the presentation material? Why would it need to be developed externally from Austrade? Do you have the resources or do you these sort of presentation materials in-house? Perhaps if we could get a snapshot of the presentation material supplied. Now, racing right along: Newgate Communications had a contract for about $10,000 worth of public relation services. Can we get a snapshot of what the nature of this work was? You've got your own media team; can you not do that yourself? Are you so disparate that you have no knowledge of these? Is it that we have plucked them out of AusTender and they are confounding you? With a tender to Newgate Communications on that timetable, with a contract period of 31 May to 8 June, what would that have been for?

Mr Nichles : Any part of the organisation, particularly our trade and investment people, could have engaged Newgate Communications. They could have prepared marketing material. They could have prepared media releases. They may have been unique, as we didn't have the resources or the skills in-house.

Senator GALLACHER: What's the best number to give you on this document that will allow you to quickly resource this?

Mr Nichles : I'm sorry?

Senator GALLACHER: There's that number at the top there, the CN ID. Is that the number that you could punch into a computer and it would give you a detail of what has happened?

Mr Nichles : Here, tonight?

Senator GALLACHER: Not tonight, no.

Mr Nichles : On notice, certainly. The AusTender number would be sufficient.

Senator GALLACHER: I'll get the secretariat to pass all of these AusTender numbers on. I have a couple of minutes to go. Is Australia Week in China off? Are we still doing an Australia Week in China or not?

Ms Ralston : Our focus in 2018 is definitely on the Chinese International Import Expo, which is taking from 5 to 9 November. It is a large and unique opportunity to showcase Australian expertise in China.

Senator GALLACHER: The previously held Australia Week in China is not scheduled?

Ms Ralston : We wouldn't normally run two large-scale events in the same country in a similar time frame. The focus this year is on the Chinese International Import Expo. We will consider options for 2019.

Senator GALLACHER: Budget paper No. 2 from 2015-2016 budget indicated the funding for Australia Week in China is due to expire this year?

Ms Ralston : That's right, at the end of the year.

Senator GALLACHER: There was funding for it; is that correct?

Ms Ralston : Yes, the funding was rolled over from 2017-18 into this financial year, but the program terminates at the end of 2018-19.

Senator GALLACHER: The money is allocated in the budget, but who made the decision that we wouldn't have Australia Week in China and that we'd do something else?

Ms Ralston : It was a decision of the government in the budget papers to roll that funding into this financial year.

Mr Hazlehurst : If I may, the financial year runs, obviously, until the end of June 2019. The government hasn't yet made a decision about the application of those funds to Australia Week activities. They could occur in relation to Australia Week in China, but the original budget measure was in relation to Australia Weeks in general and, I believe, particularly in relation to the US, India, China, ASEAN and Indonesia.

Senator GALLACHER: Perhaps I will cut to the chase. There is a letter here addressed to former Senator Chris Back, the former chair of this august committee, from a Mr Grame Barty, the executive director of international operations at Austrade. It says that the second Australia Week in China event was delivered in April 2016 and funded through this measure, and a third event is tentatively scheduled for the first half of 2018. That's not happening?

Senator Payne: It has to be a letter of some age, given that Chris Back is four chairs of the committee ago.

Senator GALLACHER: You have promoted people rapidly. I have been on this committee and seen seven chairs.

Senator Payne: You are the consistent core; there is no doubt about that! But it does seem to be a slightly old letter.

Senator GALLACHER: The date of that letter is 31 March 2017.

Senator Payne: So 18 months old.

Senator GALLACHER: That's fine.

Senator Payne: Yes, I was just clarifying that.

Senator GALLACHER: It has been tentatively scheduled. It has definitely not been held, and the money has been used for what?

Ms Ralston : The original intention of the budget measure was to hold two major Australia Week events around the world each year, and every alternate year would be one in China potentially. That was definitely the early intention of the measure. There was a China Week in 2014 and 2016, and so naturally 2018 was under consideration. The establishment of the Chinese International Import Expo was something that wasn't envisaged at that time. It is the largest scale event we will have seen in China. It is an important event for Australia to be present at. It doesn't make sense to run Australia Week in China in the same breath, so we have to reconsider that.

Senator GALLACHER: Plans change, and it is not going to be held. That is the end of it. That's me done.

CHAIR: Thank you very much, Austrade. The chief operating officer wants to tell us something extra.

Mr Nichles : I will correct the record. I didn't turn my page. In terms of the code of conduct investigations, there were actually seven in Australia and three overseas.

CHAIR: So there were 10, not two.

Mr Nichles : That was in the last financial year.

CHAIR: Can you quickly tell us if they were they all bullying? Were there some financial issues?

Mr Nichles : Bullying, bullying, bullying, conflict of interest, breach of IT user policy, inappropriate conduct during a videoconference and abusive behaviour.

CHAIR: Do you want any follow-up questions on that, Senator Gallacher?

Senator GALLACHER: Sorry, I didn't quite catch that.

CHAIR: There were 10, as I understand it.

Mr Nichles : In the last financial year, yes.

CHAIR: Not two, but 10.

Senator GALLACHER: Detailing the nature—

CHAIR: The nature of them, from bullying to—

Senator GALLACHER: What was it?

Mr Nichles : Bullying, underperformance, bullying, conflict of interest, bullying, bullying, bullying, bullying, conflict of interest, breach of IT user policy and inappropriate conduct during a videoconference.

Senator GALLACHER: We would appreciate, as far as you can: the full costs, the nature of the proceedings and whether there was finality or not. Thank you.

CHAIR: Thank you very much to Austrade.

Proceedings suspended from 21:17 to 21 : 30