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Foreign Affairs, Defence and Trade Legislation Committee
01/06/2018
Estimates
FOREIGN AFFAIRS AND TRADE PORTFOLIO
Australian Trade and Investment Commission

Australian Trade and Investment Commission

[14:42]

CHAIR: We now move to the examination of the Australian Trade and Investment Commission. I now welcome back the chief executive officer, Dr Stephanie Fahey; Mr Hazlehurst; and any other officers who are here today from the commission. Dr Fahey, would you like to make an opening statement?

Dr Fahey : No.

CHAIR: Before I hand to Senator Gallacher, I understand that Senator Abetz has a follow-up question from the last answer.

Senator ABETZ: My misdirected question! I don't know, Dr Fahey, whether you heard it or not, but it was in relation to the trade or export figures from my home state of Tasmania and whether any description can be provided as to the growth in the last 12 or 24 months. Is somebody able to assist? Mr Putt seems to be able to do that.

Mr Putt : The tax exports by value from Tasmania year on year have grown very strongly. There's been high growth in a number of segments. A few examples are that, in Saudi Arabia, there's been good growth in zinc; Korea has shown strong growth in aluminium; and Malaysia, for example, has also had great growth in zinc. The markets are the normal ones you'd expect. China's good, as is Japan, but Taiwan, Indonesia and Malaysia are also very strong markets for Tasmanian exports.

Austrade have been working with a few. There's a great example of a cherry exporter that we worked for that have now increased a lot of sales to the Indian market, which they hadn't before, and there's a timber company that's entered the Korean market for the very first time and has also increased its exports.

Senator ABETZ: Thank you for those examples. I know from my own experience in Tasmania that there are a multitude of examples, but that expansion in recent times and those examples to which you refer—have they largely been on the back of the free trade agreements that we've been able to negotiate with the countries to which you refer?

Mr Putt : There's no doubt that that has had a very strong impact, yes—but also a strong interest in the quality of product that comes from Tasmania.

Senator ABETZ: That goes without saying in relation to product from Tasmania.

Mr Putt : Yes, it does.

Senator ABETZ: But the TPP-11 we hope for will also then enhance the export opportunities for producers in the state of Tasmania?

Mr Putt : Senator, could I take that on notice—

Senator ABETZ: Yes, of course.

Mr Putt : because I think that's quite a technical question, and I need to get more work done.

Senator ABETZ: All right. Thank you very much.

Senator MOORE: Mr Putt, you might want to stay because I'm just going to follow up on Senator Abetz's question. In the DFAT estimates, we were asking a series of questions similar to those which we ask every time about the impact of free trade agreements on particular industries. I asked, 'How do you know what the factors are that have determined the change in getting more sales or getting less sales?' We went into a long discussion about all kinds of things that impact on that result. It can be markets. It can be weather. It can be all kinds of things. We particularly asked about whether signing a free trade agreement made a difference, and then I asked the officer to tell me: 'How do you find out?' So, when you were so confident in your answer to Senator Abetz about the free trade agreement having a direct impact on those industries, how do you know that was the impact?

Mr Putt : There was some empirical evidence that supported that and some numbers. Obviously, when you dig down and look at the macros of it, that gives you an indication as well, and you look at year on year. There are also mitigating circumstances. For example, last year in India they had an oversupply of chickpeas, and that ruined our export industry. So there are things that happen in markets where we will go: 'Hold on, that does hurt or impact what we're doing on the free trade.'

Mr Nichles : Just to supplement some of the answers that my colleague has made: we also access Customs data. Depending on the country, they make that information publicly available. From Japan, for example, with JAEPA, we know that the proportion of goods going into that country tariff free is now close to 98 per cent. The Japanese Customs reports that information publicly. Austrade then drill down to look at the sectors and then some of the organisations that we know who may have been exporting or are not taking advantage of that particular free trade agreement.

Senator MOORE: The other thing we asked was whether you talk to people: 'Did this make a difference in your sales?' And did this make a difference to the other people in buying? It's just one of those things: to attribute cause and effect, how you do it effectively and how you are seen to be able to justify that statement. So thank you. We have all those answers on record, so we'll go back and have a look at that.

I've got some particular questions—and you would expect them, because we ask them—about Australia Week in China and what's happening with that. It's just a series of questions I'll run through. We have a copy of Budget Paper No. 2 from the 2015-16 budget, which indicates that funding for Australia Week in China is due to expire this year. Is funding for future Australia Weeks in China listed in the budget papers for the 2018-19 budget and over the forward estimates?

Dr Fahey : Australia Week in China, as you know, was scheduled for this year.

Senator MOORE: It was early 2018, wasn't it—not an actual date but early 2018?

Dr Fahey : It was scheduled for this year. The date is still under consideration. But, as you are probably also aware, the Chinese have announced a major import expo which is going to take place in Shanghai in early November. It's an unprecedented event in China. There are going to be 150,000 Chinese companies there who are going to be buying product from overseas, so there are going to be thousands of companies from all around the world visiting Shanghai at that time. It represents a huge opportunity for Australian exporters, and a lot of energy has been poured into that particular event.

Senator MOORE: Yes, we note that. So you're making the link between Australia Week in China and the Shanghai event?

Dr Fahey : The timing of the business week in China is still under consideration. But we're focusing on the import expo at the moment and not having both of those events bumping into each other.

Senator MOORE: Sure. That's understandable. For the funding for Australia Week in China, the 2015-16 budget papers had, clearly, $2. 8 million against 2018-19. Is that money secure in the budget for 2018-19?

Dr Fahey : There was money that was allocated for this current financial year, and we now have the flexibility to carry that to the next financial year if that's required.

Senator MOORE: So that's '17-'18?

Dr Fahey : Yes.

Senator MOORE: I'm just reading an extract from the budget papers from 2015-16, which has 0.8, 2015-16; 2.8, '16-'17; 2.8, '17-'18 and 2.8, '18-'19.

Ms Ralston : The budget measure you refer to had funding for two major Australia Week events around the world each year as part of that initiative. As Dr Fahey said, the money has been carried forward into 2018-19, so we can use some of that funding into the next year, but the actual timing and planning of events is under consideration.

Senator MOORE: So the '17-'18 allocation has been carried forward?

Ms Ralston : That's right.

Senator MOORE: What about the 2. 8 that was in '18-'19?

Ms Ralston : I might just check—

Senator MOORE: I totally understand the point about being flexible and being able to plan what you want to do. I'm just chasing the dollars.

Ms Ralston : We might just take that on notice.

Senator MOORE: Rather than everyone opening up budget papers—yes, that's okay. Did you have an evaluation of the previous Australia Week in China events?

Ms Ralston : Yes. For all the Australia Week events we run, we run evaluations of the participants and we track the media and the feedback from the broad promotional aspects of the programs, as well as the companies' individual success and the business outcomes that they achieved.

Senator MOORE: How did it stack up?

Ms Ralston : I think there were good results. Each of the business weeks have had good impacts. Let me just refer to my papers. In fact, I don't actually have the Australia Week from last time around in this folder. I have some results from Indonesia and India and other business events, but I think we can provide that to you on notice.

Senator MOORE: Take it on notice. It's a standard format. Subject to the previous questions I asked about the free trade agreement, how much export and investment have previous Australia Week in China events generated? Have you been tracking that? So you have the big event—and my understanding is that it's very impressive and there's lots of media and engagement—and you have an evaluation of that event, but, in that next period of time, to be able to track what has happened, do you maintain an evaluation mechanism post the event to gather that information?

Ms Ralston : With all of the companies we work with in international markets, we track some of the results of the activities that occur as a result of those activities, so we'll have some information for you on notice.

Senator MOORE: That would be great.

Senator GALLACHER: What happens if you don't do it? Can you measure an effect then? One of the problems we had with the Dubai and the Shanghai expenditure—and that was $80 million, and another quite large parcel in 2020—from the evidence from Foreign Affairs is that we get lots of people through the door, but we don't actually see sales or contracts or measurable economic activity. Is this the same?

Ms Ralston : I think some of the major missions have a number of elements to them. One is a general promotional awareness of Australia in those particular markets, and certainly we target markets where there is a need to raise the profile, whether that is around certain industry sectors or certain parts of our economy that we want to increase. So there's an element of general awareness that comes from these activities. Then where Austrade focuses particularly is on the benefits for individual companies that participate. That's a very different type of measure. We're very focused on ensuring that the companies that attend meet business partners and realise business outcomes as a consequence. So I think there are a couple of levels—

Senator GALLACHER: My view is that it should be treated either as advertising or as an economic indicator. I think there's a lack of clarity about that in the explanation we sometimes get. If we've simply got to advertise then fine—let's go and do that. That's what an advertising budget is for. But if we think it's somehow going to lead to sales or whatever, and we can't justify that, then we need to be clear about that. Sorry, Senator Moore.

Senator MOORE: That's okay. Is it in the department's plan to have an Australia Week in China next year, '18-'19?

Dr Fahey : The date for Australia Week in China is still under consideration.

Senator MOORE: For this year and next year?

Dr Fahey : That's right.

Senator MOORE: And that's a consideration that the department makes?

Dr Fahey : It will be a call for the minister.

Senator MOORE: Has the minister directed the department to halt preparations for Australia Week in China this year?

Dr Fahey : We're always at the ready. Our team has anticipated an Australia Week in China. We've done a lot of the preparatory work.

Senator MOORE: Has the minister directed a halt to that work this year?

Dr Fahey : No, he hasn't.

Senator MOORE: Has the department provided the minister's office with potential dates for an Australia Week in China event?

Dr Fahey : No, we haven't.

Senator MOORE: What direction, if any, has the minister's office given to the department about Australia Week in China in 2018?

Dr Fahey : That the date is still under consideration.

Senator MOORE: Are there any other considerations, beyond the issue around the alternative event in Shanghai?

Dr Fahey : There would be the minister's availability. That would be a major factor.

Senator MOORE: Has the department advised the minister's office that an Australia Week in China event is not desirable this year?

Dr Fahey : No.

Senator MOORE: And vice versa. Has the minister advised the department that an Australia Week in China is not desirable this year?

Dr Fahey : No.

Senator MOORE: Has there have been any other advice to the department about Australia Week in China this year?

Dr Fahey : We discuss the opportunities for Australia Week in China on a fairly regular basis, not only with our minister but also with DFAT and others who would be involved. It does represent—

Senator MOORE: Who would they be? What other ministries? I'm just checking whether my head's going the same way as the department's. Naturally, DFAT.

Dr Fahey : DFAT. Perhaps even the department of agriculture. The department of industry. Tourism, TA.

Senator MOORE: PM&C?

Dr Fahey : They have an international branch; they're very interested.

Senator MOORE: So you've had discussions with these people, but there's not been advice or a decision around not having an Australia Week in China this year?

Dr Fahey : That's correct.

Senator MOORE: Thank you. That's that series of questions.

Senator GALLACHER: If we could move to Austrade efficiencies in the 2018 budget. In the budget paper on page 102 it says that Austrade is having its funding cut by $6.6 million over five years—is that correct?

Dr Fahey : That's correct.

Senator GALLACHER: The funding cut is from two sources—is that also correct?

Dr Fahey : We are looking for efficiency dividends. My colleagues Nick Nichles and Rob O'Meara, the CFO, will be able to take you through the details.

Senator GALLACHER: A couple of grants programs are being cut. Where is the money coming from?

Dr Fahey : From the Australian Tropical Medicine Commercialisation Grants Program and a reduction in some departmental costs.

Senator GALLACHER: Across-the-board efficiencies across all of your department and one particular program.

Dr Fahey : That's right.

Senator GALLACHER: How much has been taken out of the Australian Tropical Medicine Commercialisation Grants Program?

Mr O ' Meara : About $1 million.

Senator GALLACHER: Is that over—

Mr O ' Meara : It was over two years, I believe.

Senator GALLACHER: As a proportion of the $6.6 million, how much is that? So it's $1 million in total.

Mr O' Meara : Correct.

Senator GALLACHER: Over how many years?

Mr O' Meara : I don't have the detail here. I can come back to you on that, on notice.

Senator GALLACHER: Does this cut all of the grants program, or is there still residual funding there?

Mr O' Meara : There is some residual funding. There were some grants in place already which had been approved.

Senator GALLACHER: What is the size of the residual funding after the cut?

Ms Ralston : The Australian tropical medicine grant was made up of $8.5 million, initially, committed to the grants program. It's been revised down as a consequence of the money being handed back. It's not so much been cut from the program. The program required the grant recipients to achieve matching funding from commercial investors. Where, in this particular project, the matching funding wasn't realised, the grant has been handed back. There were 12 grants under the program. Eleven are continuing successfully and well.

Senator GALLACHER: So there is residual funding, so the work will still continue?

Ms Ralston : Yes, 11 of the 12 grants are continuing.

Senator GALLACHER: Why was this particular area deemed to be appropriate to cut? What was the rationale?

Ms Ralston : It wasn't actually cut as such. The requirement for the grant recipients is to achieve matching funding from a commercial investor. It wasn't realised in this particular grant, so there was $1 million that had been allocated but was then returned.

Senator GALLACHER: So it was undersubscribed?

Ms Ralston : In one particular grant, essentially it didn't come to fruition.

Senator GALLACHER: How many grants have been delivered so far?

Ms Ralston : I think there are 11 projects that either have been successfully completed or are in progress now.

Senator GALLACHER: All right. Perhaps on notice you could just give us some detail on that so that we can see. I was interested when a commercialisation opportunity is reduced in funding. I would have thought that would have been a winner for Austrade, but, if it's undersubscribed, fair enough. For the other $5.6 million, Dr Fahey, what you going to do there? Are you going to cut jobs and services?

Dr Fahey : We don't intend to cut jobs or services.

Senator GALLACHER: There'll be no jobs lost?

Dr Fahey : Not from this particular efficiency dividend. We're looking to streamline the way in which we deliver our services and to cut other outgoings—for example, travel. We're looking very carefully at our travel budget. So there are a number of areas where we think we can reach economies of scale.

Senator GALLACHER: It's $5.6 million. Is that over—

Dr Fahey : It is over the five-year period.

Senator GALLACHER: And your budget is how big?

Dr Fahey : It's about $191 million, excluding the grants.

Senator GALLACHER: You're saying it's doable without cutting services and/or jobs?

Dr Fahey : Yes.

Senator GALLACHER: You've just got to really examine all areas of expenditure?

Dr Fahey : Yes.

Senator GALLACHER: Would there be any services that would be impacted by this efficiency dividend?

Dr Fahey : Not to my knowledge. We're actually looking to do the reverse through increasing our efficiency and enhancing our digital delivery of service. We're actually looking to expand our services rather than reduce.

Senator GALLACHER: That's the Holy Grail, isn't it—doing more with less. Thank you for that.

Senator MOORE: I've got some questions about the start-up landing pads. Do you have the right people? We've got some questions we want to ask, and then we've got some data questions we're going to put on notice so we won't take up the time. Can you tell the committee how many start-up landing pads are currently in operation?

Mr Putt : Yes, there are five landing pads: in Berlin, San Francisco, Shanghai, Singapore and Tel Aviv.

Senator MOORE: Can you tell us also when each of them was announced and the date they officially began operation.

Mr Putt : Can I take that on notice and come back to you.

Senator MOORE: Yes, sure. You've told us where the five are.

Mr Putt : No, I have got that data.

Senator MOORE: Okay.

Mr Putt : San Francisco was in October 2017.

Senator MOORE: Was it announced or opened?

Mr Putt : Opened.

Senator MOORE: When was it announced?

Mr Putt : I'll have to come back to you on that.

Senator MOORE: Okay, we can get the first bit. So it was October 2017 for San Francisco.

Mr Putt : Sorry, 1 June 2016. Then Tel Aviv was September 2016, Shanghai was February 2017, Berlin was January 2017, and Singapore was January 2017. That's when the first start-ups were in location.

Senator MOORE: All right. We'll put on notice when they were announced. Can you explain why the physical location was selected for each landing pad and what criteria were taken into account when deciding to establish the location of a landing pad within a particular city. They are splendid international cities. Why were those five chosen?

Mr Putt : There are many reasons for that. I wonder if I could take that on notice and give you more detail on that.

Senator MOORE: You certainly can. That would be really useful. Also, was there a set standard criteria? Was there a core criteria and then other things taken into account—so a standard, basic approach and then there would be other things?

Mr Putt : I would like to come back to you with more specifics.

Mr Hazlehurst : At the time, these were decisions of the government. These were not matters that were left to Austrade to determine. So we'll come back to you with what we can on notice.

Senator MOORE: Sure. Wouldn't it be standard, Mr Hazlehurst? A decision on anything would end up being a government decision but usually on advice from the department. So was this different?

Mr Hazlehurst : The government leaves a range of operational matters to an organisation like Austrade to determine. But, in this instance, the location of the landing pads was something that was determined by the government. We'll come back to you with more detail.

Senator MOORE: With as much as you can. I would imagine there was no expression of interest process; it was a decision taken on whatever basis the minister decided met the need. But was there a public process at all, talking about what they were hoping to do and where they'd be likely to be? You can take it on notice.

Mr Hazlehurst : I don't recall one. This occurred during, as you would recall, the lead-up to and then the period after the announcement of the National Innovation and Science Agenda.

Senator MOORE: Yes, 2015-16.

Mr Hazlehurst : We can go back to our records and provide an answer on those.

Senator MOORE: Anything we can get would be appreciated.

CHAIR: It could also be that there was advice from an industry portfolio as well as from the departments.

Mr Hazlehurst : Indeed.

CHAIR: So, yes, if you could have a look at that as well.

Senator MOORE: Whatever we can get on what the basis of the decision was.

Senator GALLACHER: I've been to the one in Tel Aviv, and it was all over my head. It's been in operation for a while now. Are we seeing any results coming out of it?

Mr Putt : We have cohorts that go on all the landing pads, and we do customer satisfaction after that. On top of that, I've got real examples of real outcomes from companies that have gone to these areas and got real market results.

Senator GALLACHER: Perhaps on notice that would be really interesting reading, if nothing else.

Mr Putt : Sure.

CHAIR: If you could break that down by state as well that would be helpful.

Senator MOORE: Is there standard information about what the landing pads are responsible for doing? What metrics does Austrade use to measure the success of the landing pad in meeting its objectives? Is that the kind of thing you want to take on notice, Mr Putt, or is that something you can tell us?

Mr Putt : I'm happy to take it on notice but, in general terms, what we look for in getting those landing pads into the country is that they have some market traction; that they have some differential; that they can actually be successful; that they have market relevance—which I think is really important; and they need to show what they can do is scalable. We look at the ones that make a difference, using taxpayers' money well. There's also traction with customers. I think it's really important that they can manufacture something, either a service or a product, and have traction with customers.

Senator MOORE: Have you seen distinct differences? They are five distinctly different communities. You won't be able to give me this in detail, but have there been discernible differences in the way they operate?

Mr Putt : I think there has, and I would like to take that on notice and provide more detail.

Senator MOORE: I understand.

Dr Fahey : Perhaps I can add a little. As you say, the landing pads are quite different in character, because the markets in which they're located are quite different. The landing pad in Tel Aviv is for early stage start-ups. The experience that our start-ups have had when they have gone to Tel Aviv is that they realise the enormity of the opportunity. There is a very strong entrepreneurial culture in Tel Aviv. There have been a number of start-ups—I think 45—that have accessed that particular landing pad. Comparing Tel Aviv to San Francisco, San Francisco is in a very established founders environment. There's a large Australian founders community in San Francisco. So the opportunities that our start-ups have when they go to San Francisco are quite different to their experience in Tel Aviv. We actually monitor the start-ups that go into each of the landing pads. We have managers in each of the landing pads and they regularly communicate with each other and also back on shore. So it's a very active program within Austrade.

Senator MOORE: By the very nature of it, it would have to be, wouldn't it—just by the whole intent?

Mr Putt : And they learn off each other, too; that's really important.

Senator MOORE: So there is that regular communication between the five.

Mr Putt : Yes.

Senator MOORE: Is there a sense of competition?

Mr Putt : Depending on what their product base is, I don't know. There could potentially be.

Senator MOORE: This may need to be taken on notice as well: can you define what you categorise as successful assistance of a start-up, and what tangible outcome does Austrade rely upon for this?

Mr Putt : Those criteria I talked about, to me, are how we define success. But there have been unbelievable examples of companies that have achieved quite good results.

Senator MOORE: So you use a case study model to tell people how it's going?

Mr Putt : Yes.

Senator MOORE: You take group A and say, 'This is how it worked,' and use it like that?

Mr Putt : Yes. But not everyone has results—can I be clear on that. Some come home empty-handed.

Senator MOORE: Do you assess why they haven't got results, as well?

Mr Putt : I'm sure we do; I don't have that data with me.

Dr Fahey : Perhaps I can add that I've had the privilege of visiting a couple of our landing pads, so it's very fresh in my mind. We do have a survey tool and we ask start-ups whether it's met their expectations and whether they've been able to secure a customer while they've been in the landing pad situation, or an investor.

Senator MOORE: Which is a really tangible result, isn't it, if you can grab one of those? Or both?

Dr Fahey : Yes; very tangible. So we do drill down into the experience of each of those landing pad experiences, and when they come back to Australia we continue to work with those companies. It's not as if they just have the three-month period in the landing pad; they'll come back and we'll continue to work from our services and technologies industry sector.

Senator MOORE: I think it's really important—almost more important—to see why things haven't worked as opposed to how they work. Because, once they're working, they're off and running, but you have to find out why when they haven't.

Mr Hazlehurst : As you'd appreciate—and it goes to some of the questions I believe you asked of DFAT in relation to FTAs as well—tracking the long-term impacts of investments like these is quite challenging—

Senator MOORE: Very challenging.

Mr Hazlehurst : but some of the short-term feedback we get is remarkably positive. In relation to, for example, the survey that Dr Fahey referred to, the first cohort in 2018 completed a survey, and 87 per cent of respondents achieved or expected to achieve a commercial outcome within 90 days of commencing their residency in the landing pad. Now, I don't want to oversell that as a final, determinative measure of the success or otherwise of the whole program, but it gives you a sense of the strength of the positive experience of the Landing pad participants in terms of achieving a commercial outcome.

Senator MOORE: And a sense of confidence. That's a very confident statement.

Mr Hazlehurst : Yes. Indeed, then 81 per cent of the same group rated the quality of the market insights provided by Austrade; and the quality of the business networks, connections and introductions from Austrade as good, very good or excellent. Again, I don't want to overstate that as a definitive measure of outcomes, but you can tell from the strength of that number that the overall experience of the landing pad participants, and the commercial outcomes they achieved from those experiences, is very positive.

Senator MOORE: Okay. Can you advise how many staff are assigned within Australia to support the management of the program?

Mr Putt : Yes. At the moment we've got three people full time on it.

Senator MOORE: Three people in Australia?

Mr Putt : Yes. And then I've got an SES officer, part of whose time is also allocated to managing that.

Senator MOORE: And what about the staff at each of the pads?

Mr Putt : There's a landing pad manager at each location, and they will access, as required, existing staff that we have in our posts.

Senator MOORE: So you work very closely with the posts?

Mr Putt : Yes, because it's about sharing information opportunities.

Senator MOORE: But there's one dedicated person who's got landing pad responsibility?

Mr Putt : Correct.

Senator MOORE: Can you detail the amount of money Austrade has paid to WeWork, covering the 90-day residency period per landing pad, broken down by location and how much every financial year since 2015-16? Could you do that now, Mr Putt!

Mr Putt : Would you mind if I take that on notice?

Senator MOORE: No—certainly, on notice is fine. But that's the kind of data you'd have?

Mr Putt : Yes.

Senator MOORE: Once the Australian start-ups have reached the maximum 90-day residency limit and are required to leave the landing pad, can you tell me what support measures are in place to help these start-ups? We began talking about that a little bit. So they've completed the 90 days—I'd have thought it would be a pretty competitive process to even get that far—

Dr Fahey : Yes, it is.

Senator MOORE: They've got there, they've had 90 days and they come home. What is in the system to provide support at that stage?

Dr Fahey : Within Austrade now we have eight separate industry teams that report to Mr Putt. Depending on which sector those start-ups fall in, we would have people on shore who would also be working with those start-ups. It is a very vibrant community, and we work together with the states and territories and also some of the start-up ecosystem, so Stone & Chalk, Fishburners—there are a number of these incubators in Australia and we work very closely with those incubators.

Senator MOORE: Is there any expectation, once they have been through the program, that they stay in touch and provide inspiration and information for new people? They have graduated, they have gone through this program, they have been a success. Is there any expectation that we keep using the success of those people after they have finished the program?

Dr Fahey : In fact we've created a peer-to-peer community.

Senator MOORE: An alumni thing.

Dr Fahey : It's like an alumni group, but it's online and they support each other. It's not only those who are the alumni of the Landing Pads program, but also founders who may have been in those markets. They may be beyond their fourth start-up. So we also have a mentor relationship between some of those people who are willing to give back to the next generation of start-ups coming through.

Senator MOORE: Do you have an advertising program to build awareness of the existence of the Landing Pads? Can you provide the objectives of any campaign and metrics used to measure performance and advertising since 2015-16? Do you have an advertising campaign?

Dr Fahey : As you would expect, the start-up community receive their information in different ways to the way other businesses might receive that information. There are online communities, and we are putting information into those online communities. We actually go where those start-ups are. We don't advertise in a traditional way, but we do profile the opportunities through those communities. We do have information on our website, of course, but we're much more proactive than that. In the last couple of weeks, we've also run a campaign called Sprint to Landing Pads. There have been five of them run around the country in collaboration with a professional services firm. I had an opportunity to attend the Sprint to Landing Pads session in Sydney, where it went through some of the challenges that a start-up might have when they export: not only how you find customers, how you find investors, but then how do you employ staff in that new market? What's the appropriate tax regime that you might adopt for a company that will be operating in two geographies? What about the contracts between the founders?

Senator MOORE: So business advice?

Dr Fahey : Business advice, but very targeted towards the start-up community. We are in the process of running five of those. The one in Sydney must have been attended by 200 people.

Senator MOORE: Is there information about that Sprint to Landing Pads program on your website?

Dr Fahey : I'm not quite sure.

Senator MOORE: Can we get some information from you about the background to that end the cost? That's gone out to a professional firm.

Dr Fahey : It's in collaboration.

Senator MOORE: Can we get some information on the cost of that, the format and whatever kind of review process you have that?

Dr Fahey : We'd be happy to.

Senator MOORE: You've gone through a round. I'm just going to ask two more of these and put everything else on notice. You've had the program since 2015-16. Has there been an review, either internally by Austrade or an outside agent, to look at how the Landing Pads program is working?

Dr Fahey : We constantly review the program, because as you know it is a relatively young program. We're constantly collecting data and feedback from the participants. We're also in the process of thinking about what Landing Pads 2.0 might look like. How can we increase the impact? It's an iterative program. It's something we're very invested in.

Senator MOORE: Is there a plan to do a more formal review—a standard public sector review of the whole program?

Dr Fahey : I'm not sure whether that was part of the funding in the initial stages.

Senator MOORE: Can we get that on notice as well? It's more or less standard process. And see what's in place for that. Mr Putt, we had some staffing questions before, but it's about the training and the kind of people, and I'll put them on notice in the interests of time. Thank you very much.

CHAIR: I have a couple of questions I suspect you may need to divert elsewhere. First of all, it's about our lithium, rare earth and tech metal industries and the opportunities we've now got to export. Obviously, as a Western Australia senator, it's something that I'm very engaged with, working with industry to take it beyond mining. As you know, we've got great processing, in fact very shortly, in the next couple of years, on current trends we'll be processing 100 per cent of the world's current demand for lithium. There are huge opportunities now not only for lithium, in terms of processing, but also for other rare earths and tech metals. Is that a space you're involved in in terms of helping develop those industries along the value chain?

Mr Putt : It's a very timely issue for us because Australia is obviously a leading lithium producer and also holds a large part of the world's supply. Austrade believes Australia can leverage its natural competitive advantages here and develop a domestic lithium-ion battery manufacturing capability.

CHAIR: Those words are music to my ears. Please continue till we get to manufacturing.

Mr Putt : To support this view, about eight weeks ago we commissioned a report by a Perth based consultancy called Future Smart Strategies to help identify a strategic approach. It's not just about lithium; it's about rare earths and those components that make it into batteries. The thing that we want to think about is how can that demonstrate downstream critical components and manufacturing battery production? As you said, it is a significant gap in our supply chain. We'll have the report finished in the next quarter for release by the minister.

CHAIR: As I said, that's enormously gratifying for me to hear that. Are you also looking at electrochemical processing? Obviously once you've processed, for a lot of these minerals, including lithium, you look to take it down the value chain of electrochemical processing, which I don't think we have a great capability in yet, but we need to do to take it to battery production. Are you looking at the book end of the value chain process, or is the study going through all five stages?

Mr Putt : I'm not the world's expert on this.

CHAIR: Neither I am, but there was a fantastic AMEC report out about the value chain. I found it very instructive.

Mr Putt : I think our report is looking at that, but I would want to put it on notice to make sure my facts are specific.

CHAIR: Thank you. That's lithium. In terms of other tech metals and rare earths, Australia also has a large chunk of many of these nationally strategically important minerals. There was a report in the United States recently that identified access to these minerals as a sovereign risk. Obviously it is for a number of our other trading partners and strategic partners. Is this review going to have a look at not just the economics—this might be going out of Austrade's area—but is there anyone else, maybe at DFAT or elsewhere, looking at the strategic considerations for Australia in terms of having these metals that are so strategically important in the twenty-first century?

Mr Putt : This report won't cover that.

CHAIR: Could you take that on notice? Or I might put it on notice for DFAT to see whether anyone else is aware of that. And again on notice, could you take it out from lithium and where you see the opportunities are? Obviously we don't have a battery manufacturer here, so maybe if you can take it on notice, we're looking at ways we can attract one of the big battery manufacturers to Australia, preferably Western Australia where we're processing the ore, but that's a little parochial. I'm happy for you to take it on notice, but are you aware of any of the current major battery manufacturers that we have approached or we could approach, or they have approached us about this?

Mr Putt : We have been talking to a number of the large globals on that. One of our senior investment specialists in resources and energy has been spending time on this. It is actioned, but we haven't landed that particular goal yet.

CHAIR: Could I ask you to take that on notice as well and provide some further information on that. I would be very interested, and, again from a Western Australia perspective, there's no point doing things at a state level and replicating what you're already doing at Austrade.

Mr Putt : We are looking at this.

CHAIR: Thank you very much. And another one, which I suspect may be for Mr Hazlehurst: Mining Indaba this year. As you know, I've got a special place in my heart now for Mining Indaba, and I continue to work closely with the Western Australia resources and extractive sectors. I'm wondering whether you've got a report back from Indaba this year?

Mr Hazlehurst : No, Senator, I don't have a report back from Indaba with me today.

CHAIR: I'd be very happy if you could take that on notice.

Mr Hazlehurst : I would be delighted to take that on notice.

CHAIR: I'd very much like to share that with the industry back in Perth.

Mr Hazlehurst : Of course. One thing I might offer is that, in addition to what we might be able to provide on notice, we'd also be happy to offer you, as chair, and any other interested committee members some briefing from our senior investment specialist, who specialises in this area of lithium and rare earths. Would that be something of value to you?

CHAIR: Absolutely. As chair, I would be delighted to take up that offer, and I'll discuss it with the committee. I'm sure some other committee members here would be interested as well. Thank you very much for that.

Senator RHIANNON: I have some questions for Austrade. I note that, in 2017, the Australia-Ecuador Business Summit was held in Quito to promote Australia's expertise and capacity to support Ecuador's growing mining sector. What I've also become aware of is that, in Ecuador, mining is quite challenging because Ecuador is widely regarded as the most biodiverse country in the world. I wanted to check in with you about how Austrade is working in Ecuador. Is Austrade aware that Australian companies own mining concessions in protected forest reserves and indigenous territories?

Mr Hazlehurst : Subject to any observations that my colleagues would like to make, you'll forgive us, but that's a very specific question. We'd be very happy to provide whatever information we can on notice, but I don't believe we'll have the capacity to answer—

Senator RHIANNON: Nobody's here to answer it? That's really sad.

Mr Hazlehurst : Ecuador is one of a very great number of countries in which Australian businesses are active. I doubt we will have someone here today that has the detail on those matters.

Senator RHIANNON: I'll try and ask some of the questions in a general way, because this is happening right now, and that's why I've been lobbied about it. Does Austrade support mining activities in areas earmarked for biodiversity and watershed conservation and in areas where ranching and agriculture have been prohibited for decades? It would seem a contradiction that mining is then allowed to come in. Do you have a position on that?

Mr Hazlehurst : A general position for Austrade would be that we would seek to connect Australian businesses with opportunities elsewhere in the world. Our understanding would of course then be that those Australian companies would be required to operate consistent with the laws of the country in which they're operating and indeed with any other international arrangements that are in place. It's not, fundamentally, our role to enforce the laws of another country.

Senator RHIANNON: But isn't this an ongoing controversy? It sounds good when we're sitting here a long way away: 'We obey the laws of the country.' But when the laws of the country can readily change—and there is an implication here for public Australian money that's been used in the past, through the old AusAID organisation, where it played a role in contributing to these protected areas. So we've had a government agency working in Ecuador with a non-government organisation from Australia—it's also international; it's called Rainforest Information Centre—where they helped set up one of these areas. Now I'm talking about it, I'll ask you to take this on notice. It was actually the Las Cedros Biological Reserve. It was set up previously, with public assistance from this country. Then there have been changes of government and allegations of corruption in the country. Does Austrade have some measures in place so you don't just say, 'We rely on the laws of the country'? Because the laws might change, so that it is easier for corrupt activities to occur, and Australian companies could be caught up in something that will be detrimental to the people in that country and to the standing of Australia. Do you have something to handle that?

Mr Hazlehurst : In the same way as Dr Fahey referred to earlier in terms of another part of our business, the Landing Pads program, we provide advice to companies interested in exploring opportunities in other countries about the laws of the country there and the regulations that apply. We would also, as part of the general services we provide, draw those matters to businesses' attention. But our role is one of facilitation, linking and informing; it's not one of policing the activities that occur in another country. It's beyond our remit.

Senator RHIANNON: I'm certainly not asking about policing of activities. But you're opening up possibilities for Australian companies to go into other countries—that is a fair summary of Austrade, isn't it?

Mr Hazlehurst : Particularly opportunities to export from Australia into those countries.

Senator RHIANNON: But you do more than assist with exports—like this Australia-Ecuador Business Summit, held in Quito. There were a lot of people there. It was specifically about supporting Ecuador's growing mining sector. So that's part of your work as well?

Mr Hazlehurst : Yes, I believe so. But I did say at the outset, in relation to the specific example that you gave, that we would need to take on notice precisely what our involvement was in that particular event.

ACTING CHAIR ( Senator Gallacher ): Could you give us some idea how long you will need?

Senator RHIANNON: I'll ask this question, then I'll put the rest on notice. Again, you might want to take this on notice. It goes beyond Ecuador. There have been incidents with these mining companies where, because many of the local people are opposed to it, some mining camps have been burnt down. There are quite serious implications for the workers that the mining company brings in. Are those things that you give advice on? Are you tracking these mining companies? Maybe in the first instance you think that going into this country is a good way to do business. But then events may change, and the local people might be taking action. Lives may be at risk. Are you giving advice to that level, particularly with these summits that you hold or ongoing advice that you might provide?

Mr Hazlehurst : In a general sense, as I said before, we certainly provide advice to companies about the regulatory environment and the business environment for the market that they are seeking to enter into. In broad terms, the answer to your question is yes. We provide advice to companies about what they can expect to find when they enter into that market. We also have arrangements in place where we provide services to businesses. We have a range of checks that we put in place around 'Is this a company that we want to do business with?' We can go into some more detail on notice, if you'd like, around that. And we keep a watching brief on that. If it turns out that there's a company that, for whatever reason, at the outset appears to have satisfied all our checks but for which subsequently further information comes to light, it could easily be a situation where Austrade might withdraw its services from that company.

Senator RHIANNON: Thank you. If you could take that on notice to provide the additional information and take on notice those earlier questions you were unable to answer.

Mr Hazlehurst : Certainly.

Senator RHIANNON: Thank you, Acting Chair.

Proceedings suspended from 15 : 35 to 15 : 46

ACTING CHAIR: We have a minister, a witness and a deputy chair. If no-one calls attention to quorum, we'll proceed.

Senator MOORE: We have a lot of questions on the restructure and also some things to put on notice. I want to ask a couple of questions about the Mortimer review. I will throw them out there and see how they go. If you have to take them on notice, that's fine. The Mortimer review was a review of export policies and programs led by David Mortimer and John Edwards in 2008. It led to a whole-of-organisation assessment of Austrade's operation in 2010—around that period. It had a lot of recommendations. I'm following up on a couple to see whether these are still real in terms of the work that you're doing. The Mortimer review made a number of recommendations specifically for Austrade, one of which was to:

Establish a unit in Austrade to provide targeted support for professional and financial services exporters.

Has that happened? Is there a specialised area for that purpose?

Dr Fahey : As you know, Senator, we have been through a recent restructure.

Senator MOORE: Yes.

Dr Fahey : We have established eight industry sectors. One of those sectors is in services and technology, and we've got a very strong financial services component in that, and not only financial services but also fin-tech, so looking at some of the new technologies around financial services.

Senator MOORE: I know you weren't in the area in 2010, but by the term 'targeted support for professional and financial services', you would expect that the restructure that you have in place meets that requirement?

Dr Fahey : Yes.

Senator MOORE: I didn't want to verbal you, but that's how I took it. Another recommendation was to:

Recognise Austrade as the focus of all Commonwealth Government export and investment facilitation and promotion activities. Support this arrangement with a clear and consistent framework of service delivery agreements and a consistent approach to performance measurement for all trade and investment development activities across government.

Dr Fahey : Across the government.

Senator MOORE: Yes.

Dr Fahey : We put in place requirements for our own staff in terms of consistency in terms of service delivery. We have 1,100 staff within Austrade and 83 posts offshore. They are serviced by eight industry specialisations in Australia. We are looking for consistency of service delivery right across our footprint. We work together with other government departments—DFAT, Agriculture, Industry and all the relevant departments—that would be involved in Australian export and in encouraging productive foreign direct investment to come into Australia, because they're two of the areas that we look after.

Senator MOORE: A further recommendation was that the Defence Materiel Organisation enter into a service delivery arrangement with Austrade. Do you have a specific agreement with the Defence Materiel Organisation?

Dr Fahey : We've recently signed an MOU at the highest level. It sets the general direction of the collaboration, but we're also in the process of negotiating specific agreements underneath that high level MOU.

Senator MOORE: How recently was the MOU?

Dr Fahey : It was in May, I think the 18th—

Mr Hazlehurst : 17 May. If I may, clearly a lot of water has passed under the bridge since the Mortimer review. I think it would be accurate to say that something like the MOU we signed with the Defence department very recently is consistent with the spirit of that recommendation, but one wouldn't be able to say that we signed the MOU because of that recommendation. The MOU relates to the government's recently announced Defence Export Strategy and in particular to the embedding of business development capability into our offshore network to work specifically on defence exports.

Senator MOORE: It seems to me that the Mortimer review, which was a big deal in its day and shook up the whole area, has specifically recommended the things I've been reading out. I think it is more to see whether those kinds of directions have been fulfilled. I'm interested, perhaps on notice, in what has happened between 2010 and 2018 in the issue around the Defence Materiel Organisation and Austrade. The Mortimer review highlighted a working arrangement between those two elements of government as a key priority in 2010. You just told us in a very positive way that there is an MOU with DMO, but it was only this year. I'm interested to see what happened between there and now. It is fascinating that it highlighted this defence material area, about which Senator Gallacher questions at length in Defence estimates, as an area for particular interest. I absolutely take your point that there's a lot of water under the bridge between over that period.

Mr Hazlehurst : As a general trend a range of developments have occurred since 2010 that would be consistent with Austrade's being a focal point for the promotion of Australian industry and capability overseas. Another example would be the role we now play, which was transferred from the department of education, in the promotion of international education overseas. That's a good example of where successive governments have made a judgement that Austrade should be the focal point for that kind of promotional activity offshore.

Senator MOORE: I think another area is to see how much of the recent restructure in Austrade, about which we've put many questions on notice, is consistent with what Mortimer was—they keep calling it the Mortimer review; it was done by David Mortimer and John Edwards, so I don't know why Mr Edwards doesn't get any billing. So far with the answers, even though there are only a couple of recommendations, there does seem to be.

Mr Hazlehurst : Indeed.

Senator MOORE: I will put the rest of these on notice, but does Austrade offer international business internships with overseas postings?

Dr Fahey : We have interns that take up positions in our posts offshore. At this stage the internship program itself is not particularly well established, but we have what we call our assistant trade commissioner program, which is where we will nominate, or a staff member will apply, to go on a two-year posting. So it's to invest in the training of those younger aspirants who will later become trade commissioners and senior trade commissioners.

Senator MOORE: A step in that career?

Dr Fahey : Yes.

Mr Hazlehurst : Its formal title is the Trade Commissioner Development Program. It's run each year.

Senator MOORE: It's fairly specific: it's a development program so you can get to be a trade commissioner. Is it compulsory for anyone who is to be a trade commissioner to have gone through that process?

Dr Fahey : No.

Senator MOORE: Do we have any idea how many have?

Dr Fahey : I think we've had a couple of cohorts. There might have been up to 12. I'll check on the number.

Senator MOORE: We are trying to maintain the time. Has Austrade ever initiated a joint planning process through the COAG Ministerial Council on International Trade about how overseas assets could be more streamlined and used more efficiently?

Dr Fahey : I'm not sure that we've gone through the COAG process, but we regularly have conversations with our colleagues at state and territory level and, as you're probably aware, we have embedded counsellors from some states, including New South Wales. They embed their offshore representatives within the Austrade office. We've had discussions with other states as well. Where we can, we like to accommodate the representatives from the different states and territories within our offices, with the intention that having a critical mass in one place will be good for the Australian brand and that those who want to know about Australia will know where to go. Whether it's for a particular state, whether it's agriculture or whether it's immigration, we try to create an environment where we're co-located, similar to what we have in London with Australia House.

Senator MOORE: Minister, would the COAG Ministerial Council on International Trade be a PM&C issue, since it's COAG?

Senator McGrath: I think I'll have to take that on notice.

Senator MOORE: That particular COAG group seems to have a particular focus around international trade, which is something that is linked to Austrade. I'd like to see whether the issues we talked about have ever been on the agenda for that particular council—that link between Austrade and the ministerial council.

Senator McGrath: I'll take that on notice.

Senator MOORE: That would be great, if we can just get some information about that. It seems to be a mechanism that could have some linkages, but I don't know. Thank you. We've got quite a lot for you on notice.

Dr Fahey : Perhaps we might also add that we do have ministerial meetings in tourism and also in trade. They are separate meetings with the ministers who come from states and territories, and the meeting is chaired by Minister Ciobo.

Senator MOORE: So this is not the actual COAG meeting of those people but a side meeting on a particular issue? That makes sense.

Mr Hazlehurst : There isn't a formal COAG council anymore on international trade.

Senator MOORE: It's died?

Mr Hazlehurst : Instead we have a meeting of ministers, one on tourism and another one on trade and investment.

Senator MOORE: Taking away the COAG—because I know that became a word not to be used—in the ministerial meeting around these issues, Austrade does meet with them?

Mr Hazlehurst : Yes.

Senator MOORE: And that's part of the focus?

Mr Hazlehurst : Yes.

Senator MOORE: That's fine. Thank you.

ACTING CHAIR: That concludes the committee's examination of the Australian Trade and Investment Commission, and I thank Dr Fahey and the Austrade officers for their attendance.