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Department of Foreign Affairs and Trade—Report for 2018-19


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ANNUAL REPORT

Lima

Buenos Aires

Santiago

Auckland

Port Moresby

Lae

Jakarta

Singapore Bandar Seri Begawan

Manila

Taipei*

Tokyo

Osaka

Fukuoka

Seoul

Sapporo

Kuala Lumpur

Yangon

Hanoi

Hong Kong

Guangzhou

Chengdu Shanghai

Beijing

Ulaanbaatar

Shenyang

Ho Chi Minh City

Phnom Penh

Vientiane

Bangkok

Phuket

Colombo

Chennai

Mumbai

New Delhi

Islamabad

Kabul Tehran

Baghdad

Kuwait City

Dubai Abu Dhabi

Doha Riyadh

Amman

Beirut

Nicosia

Athens

Malta

Lisbon

Rabat

Accra

Abuja Addis Ababa

Nairobi

Port Louis

Harare

Pretoria

Madrid

Rome

Vatican City

Milan

Ankara

Istanbul

Belgrade

Zagreb Vienna

Berlin

Copenhagen

Stockholm

Warsaw

Kyiv

Moscow

Frankfurt

Brussels

The Hague

Dublin

London

Paris Geneva

Çanakkale Ramallah*

Tel Aviv

Cairo

Kathmandu

Kolkata

Dhaka

Bali

Surabaya

Makassar

Dili

Wellington

Noumea

Hobart

Melbourne

Adelaide

Perth

Darwin

Brisbane

Sydney

Canberra

Port Vila

Nauru

Tarawa

Pohnpei

Honiara

Suva

Nuku’alofa

Apia

Funafuti

São Paulo

Brasilia

Bogotá

Mexico City

Houston

Washington DC

New York

Chicago

Los Angeles

Honolulu

San Francisco

Toronto Ottawa

Port of Spain

Atlantic Ocean

Pacific Ocean

Indian Ocean

Southern Ocean

Arctic Ocean

Our posts and our people

Rolling out the largest expansion of Australia's diplomatic network in 40 years with 120 posts in 83 countries

Nine locations across Australia

Around half our posts and three quarters of our people overseas are in the Indo-Pacifi c

Our posts include embassies, high commissions, multilateral missions, consulates-general, consulates and representative offi ces*

Our posts 6,078 staff 3,136 overseas—including 2,276 locally engaged staff in our overseas posts

Australian Public Service staff

18% from culturally and linguistically diverse backgrounds

2.9% report a disability

2.7% identify as Indigenous

Our staff are profi cient in more than 30 languages

40% of our heads of mission are women

Our people

02

Lima

Buenos Aires

Santiago

Auckland

Port Moresby

Lae

Jakarta

Singapore Bandar Seri Begawan

Manila

Taipei*

Tokyo

Osaka

Fukuoka

Seoul

Sapporo

Kuala Lumpur

Yangon

Hanoi

Hong Kong

Guangzhou

Chengdu Shanghai

Beijing

Ulaanbaatar

Shenyang

Ho Chi Minh City

Phnom Penh

Vientiane

Bangkok

Phuket

Colombo

Chennai

Mumbai

New Delhi

Islamabad

Kabul Tehran

Baghdad

Kuwait City

Dubai Abu Dhabi

Doha Riyadh

Amman

Beirut

Nicosia

Athens

Malta

Lisbon

Rabat

Accra

Abuja Addis Ababa

Nairobi

Port Louis

Harare

Pretoria

Madrid

Rome

Vatican City

Milan

Ankara

Istanbul

Belgrade

Zagreb Vienna

Berlin

Copenhagen

Stockholm

Warsaw

Kyiv

Moscow

Frankfurt

Brussels

The Hague

Dublin

London

Paris Geneva

Çanakkale Ramallah*

Tel Aviv

Cairo

Kathmandu

Kolkata

Dhaka

Bali

Surabaya

Makassar

Dili

Wellington

Noumea

Hobart

Melbourne

Adelaide

Perth

Darwin

Brisbane

Sydney

Canberra

Port Vila

Nauru

Tarawa

Pohnpei

Honiara

Suva

Nuku’alofa

Apia

Funafuti

São Paulo

Brasilia

Bogotá

Mexico City

Houston

Washington DC

New York

Chicago

Los Angeles

Honolulu

San Francisco

Toronto Ottawa

Port of Spain

Atlantic Ocean

Pacific Ocean

Indian Ocean

Southern Ocean

Arctic Ocean

Our posts and our people

Rolling out the largest expansion of Australia's diplomatic network in 40 years with 120 posts in 83 countries

Nine locations across Australia

Around half our posts and three quarters of our people overseas are in the Indo-Pacifi c

Our posts include embassies, high commissions, multilateral missions, consulates-general, consulates and representative offi ces*

Our posts 6,078 staff 3,136 overseas—including 2,276 locally engaged staff in our overseas posts

Australian Public Service staff

18% from culturally and linguistically diverse backgrounds

2.9% report a disability

2.7% identify as Indigenous

Our staff are profi cient in more than 30 languages

40% of our heads of mission are women

Our people

Lima

Buenos Aires

Santiago

Auckland

Port Moresby

Lae

Jakarta

Singapore Bandar Seri Begawan

Manila

Taipei*

Tokyo

Osaka

Fukuoka

Seoul

Sapporo

Kuala Lumpur

Yangon

Hanoi

Hong Kong

Guangzhou

Chengdu Shanghai

Beijing

Ulaanbaatar

Shenyang

Ho Chi Minh City

Phnom Penh

Vientiane

Bangkok

Phuket

Colombo

Chennai

Mumbai

New Delhi

Islamabad

Kabul Tehran

Baghdad

Kuwait City

Dubai Abu Dhabi

Doha Riyadh

Amman

Beirut

Nicosia

Athens

Malta

Lisbon

Rabat

Accra

Abuja Addis Ababa

Nairobi

Port Louis

Harare

Pretoria

Madrid

Rome

Vatican City

Milan

Ankara

Istanbul

Belgrade

Zagreb Vienna

Berlin

Copenhagen

Stockholm

Warsaw

Kyiv

Moscow

Frankfurt

Brussels

The Hague

Dublin

London

Paris Geneva

Çanakkale Ramallah*

Tel Aviv

Cairo

Kathmandu

Kolkata

Dhaka

Bali

Surabaya

Makassar

Dili

Wellington

Noumea

Hobart

Melbourne

Adelaide

Perth

Darwin

Brisbane

Sydney

Canberra

Port Vila

Nauru

Tarawa

Pohnpei

Honiara

Suva

Nuku’alofa

Apia

Funafuti

São Paulo

Brasilia

Bogotá

Mexico City

Houston

Washington DC

New York

Chicago

Los Angeles

Honolulu

San Francisco

Toronto Ottawa

Port of Spain

Atlantic Ocean

Pacific Ocean

Indian Ocean

Southern Ocean

Arctic Ocean

Established as the Department of External Aff airs in 1901

First overseas post opened in London in 1910

First Australian trade commissioners appointed to Canada, New Zealand, Japan, China and the Netherlands East Indies (later Indonesia) 1934-35

Diplomatic posts established in the United States and Japan in 1940 and China in 1941

Our beginnings

DFAT posts

State and territory offices

Torres Strait Treaty Liaison Office

Austrade-managed posts providing consular services

03

Highlights 2018-19

Pursue our economic, trade and investment agenda for opportunity Priority 2

• Helped facilitate $470 billion in Australian goods and services exports • Free trade agreements signed with Indonesia and Hong Kong • Secured new access for Australian

businesses to government contracts worth $2.3 trillion in 47 international markets

Keep Australia and Australians safe and secure Priority 3

• Led international advocacy on counter-terrorism, cyber and international security • Worked against modern slavery, human

trafficking and nuclear proliferation • Supported PM leadership at G20 to prevent the use of social media

platforms by terrorists

Deliver an innovative development assistance program Priority 4

• Delivered world class $3.9 billion development assistance program • A record $1.2 billion to the Pacific • Humanitarian assistance to

Vanuatu, Indonesia and Laos for disaster response

Advance global cooperation Priority 5

• Championed human rights in the United Nations Human Rights Council • Shaped the world’s institutions, rules and norms • Flagship Australia now public

diplomacy promotion in Japan and ASEAN

Support Australians overseas Priority 6

• Issued a record 2.1 million passports • Assisted 13,715 Australians in difficulty overseas, about 1,400 consular cases each day

Provide a secure and effective overseas presence Priority 7

• Opened three new posts—Kolkata (India), Funafuti (Tuvalu) and Shenyang (China) • Award-winning Post-in-a-Box mobile

global communications capability

Promote a stable and prosperous Indo-Pacific Priority 1

• Strengthened Indo-Pacific relationships • Stepped up support for the Pacific and Timor-Leste • Celebrated five years of the

New Colombo Plan—creating people-to-people links in our region with almost 50,000 Australian scholars since 2014

04

DFAT Annual Report 2018-19

Letter of transmittal

05

Letter of transmittal

Our posts and our people 02

Highlights 2018-19 04

Letter of transmittal 05

Overviews 09

Secretary’s review 11

Departmental overview 14

Report on performance 19

Contents

Annual performance statement

Priority 1: Promote a stable and prosperous Indo-Pacific 21

Priority 2: Pursue our economic, trade and investment agenda for opportunity 39

Priority 3: Keep Australia and Australians safe and secure 53

Priority 4: Deliver an innovative development assistance program 63

Priority 5: Advance global cooperation 79

Priority 6: Support Australians overseas 91

Priority 7: Provide a secure and effective overseas presence 103

Report on financial performance 112

Management and accountability 115

Our enterprise 116

Our people 119

Our culture 121

Modernising our systems 126

External accountability 126

Managing our financial resources 128

06

DFAT Annual Report 2018-19

Financial statements 131

Independent Auditor’s Report 132

Statement by the Secretary and the Chief Financial Officer 136

Financial statements 137

Notes to and forming part of the financial statements 145

Appendixes 209

Appendix 1: Staffing overview 210

Appendix 2: Executive remuneration 218

Appendix 3: Agency resource statement 223

Appendix 4: Aid program expenditure 228

Appendix 5: Workplace health and safety 229

Appendix 6: Ecologically sustainable development and environmental performance 230

Appendix 7: Parliamentary committees of inquiry 233

Appendix 8: Advertising and market research 235

Appendix 9: Purchaser-provider arrangements 236

Appendix 10: Contributions 238

Appendix 11: List of sponsors 240

Appendix 12: Summary of the overseas network 242

Appendix 13: List of corrections 246

Appendix 14: List of requirements 248

Reference material 255

Glossary of acronyms, abbreviations and terms 256

Index 258

WARNING: Aboriginal and Torres Strait Islander readers are warned that the following report may contain images of deceased persons.

07

Contents

Secretary Frances Adamson alongside Australia’s permanent representative to the United Nations Gillian Bird at UN headquarters in New York [United Nations/Loey Felipe]

Overviews

09

Frances Adamson Secretary

Department of Foreign Affairs and Trade

10

DFAT Annual Report 2018-19

Secretary’s review

A more contested and uncertain world Australia’s international environment is undergoing a profound transformation. Trends identified in the government’s 2017 Foreign Policy White Paper are accelerating in ways that challenge our interests. Geopolitical competition in the Indo-Pacific region is intensifying as trade tensions between the United States and China deepen. Global growth is slowing and the risks to Australia’s economy are rising. Institutions that have supported peace and prosperity since the end of World War Two are under strain. Around the world, trust in democratic institutions is declining, populism is gaining ground, and breakthrough technologies are presenting as many dilemmas as they are opportunities. These trends threaten to test the practice of diplomacy.

Despite these challenges, Australia is well placed to respond to and help shape our increasingly fluid international context. The department works to maximise our influence and impact. Advancing long-term objectives can be slow and buffeted by setbacks beyond Australia’s control. When we rate the department’s performance as ‘on track’ in this report it can reflect incremental progress, or holding the line against sliding backwards.

The year in review In 2018-19 the Department of Foreign Affairs and Trade designed and delivered a range of policies and programs, implementing the White Paper and pursuing our core objective of an open, inclusive and prosperous Indo-Pacific region. We implemented policies that capitalised on our domestic strengths—our stable political system, flexible economy, resilient

institutions and liberal democratic values— and promoted the rules and principles that have enabled our country and many others to flourish. We invested in bilateral relationships, encouraged economic cooperation, and worked to shape an Indo-Pacific in which the rights of all states are respected.

Deeper engagement with the Pacific was at the forefront of the government’s international strategy. Our new Office of the Pacific began implementing the government’s ambitious Pacific Step-up. We worked with Pacific island nations to deliver a record $1.2 billion in aid to address the region’s development priorities and enhance security and sovereignty. We supported greater economic opportunities for more than 12,000 Pacific and Timor-Leste workers through the Seasonal Worker Programme and the Pacific Labour Scheme, and established the government’s $2 billion Australian Infrastructure Financing Facility for the Pacific to underpin sustainable growth in our region. Together with Japan and the United States, we signed a memorandum of understanding to mobilise private sector investment to help meet the Indo-Pacific’s infrastructure needs.

Australia’s alliance with the United States remained integral to the government’s foreign policy and we reinforced our joint commitment to supporting an open and inclusive Indo-Pacific. We pursued deeper economic and security cooperation with the region’s major democracies: Indonesia, Japan, India and the Republic of Korea. Our Australia now public diplomacy program showcased Australian innovation, diversity and creativity in Japan and Southeast Asian nations.

The department supported high-level interactions with Chinese counterparts. We began work to put in place the government’s new National Foundation

11

Secretary’s review

Overviews

for Australia-China Relations to deepen our important bilateral relationship with China. We worked to assist the government in elevating Australia’s relationship with Indonesia to a comprehensive strategic partnership and pave the way for economic gains with the conclusion of the Indonesia- Australia Comprehensive Economic Partnership Agreement.

Against a backdrop of rising protectionism, we spearheaded the government’s commitment to free trade. We worked with Austrade to help Australian companies of all sizes access a larger share of global markets, and led legislative change to provide Export Finance Australia with an additional $1 billion to assist exporters and to finance infrastructure in our region. We opened markets for business and supported new jobs, with the Trade Minister’s signing of the Australia-Hong Kong Free Trade Agreement and associated Investment Agreement. The world’s most significant trade and investment agreement in more than two decades—the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership—entered into force, with our support. We made good progress towards a Regional Comprehensive Economic Partnership and an Australia-European Union Free Trade Agreement.

The Australian-supported territorial defeat of ISIL in Iraq and Syria was an important breakthrough in the global fight against terrorism. Attacks closer to home in Sri Lanka and Christchurch reinforced the importance of the government’s commitment to countering violent extremism in all its forms. To this end, the department worked with the Department of the Prime Minister and Cabinet to support the Prime Minister in his successful efforts to secure an agreement by G20 leaders urging social media companies to guard against the weaponisation of their platforms. As part of the government’s efforts to ensure a free, open and secure cyberspace and prevent its exploitation, we worked with our partners in ASEAN and the Pacific to build resilience against cyber attacks.

Australia’s development assistance program is imbued with our values, driven by our interests and focused where we can make the most difference: the Indo-Pacific. In

2018-19 we supported Pacific partners to build stronger and more inclusive political, economic and social institutions to enhance security and prosperity. When natural disasters hit Vanuatu, Indonesia and Laos, Australia provided vital humanitarian assistance. When an outbreak of vaccine-derived poliovirus struck Papua New Guinea, we worked with global partners to immunise 3.3 million children. We concluded a five-year program to improve water, sanitation and hygiene for 5.3 million poor and vulnerable people in 19 countries, including more than 70,000 people with disabilities. We also supported 46 Australian community organisations in 15 countries to expand their valuable international development work through the government’s new Australian Aid: Friendship Grants.

Australia’s interests are strongly served by multilateral cooperation to solve global challenges. In 2018-19 we continued to help address tough cross-border issues that no one country can solve alone, including modern slavery, human trafficking, and nuclear proliferation. We played a central role in obtaining agreement on an international rulebook for implementing the Paris Agreement on climate change, and we provided humanitarian assistance for refugees fleeing conflicts in Syria and Myanmar. We assisted the government in drawing attention to human rights abuses around the world, advocating for fundamental freedoms and initiating joint statements to convey the views of traditionally underrepresented Pacific nations in the United Nations Human Rights Council. We supported the government in its advocacy for the abolition of the death penalty and in pursuing the prosecution of individuals alleged to have brought down flight MH17.

The department continued to provide high-quality, secure passport and consular services, and supported 13,715 Australians in difficulty overseas. We issued a record 2.1 million passports and developed bespoke facial recognition systems to stop fraud. The safe passage of eight Australian minors out of Syria and the return of an Australian citizen from North Korea were testament to the department’s ability to work in a cohesive and focused way across

12

DFAT Annual Report 2018-19

our network and with our partners. During the reporting year, we upgraded our Crisis Centre with state-of-the-art facilities to better coordinate Australia’s responses to emergencies overseas. The cave rescue of the Thai Wild Boars soccer team, for which the department provided logistical support, was a standout example of international cooperation in action.

As competition for influence in the international arena intensifies, Australia’s soft power—our ability to affect the behaviour and thinking of others through the power of attraction and ideas— becomes more important. During 2018-19 we leveraged our nation’s sporting excellence to build friendships in the Pacific through a new sports linkages program. We consulted widely for the first review of Australia’s soft power. We strengthened links between people and institutions by offering 3,161 Australia Awards scholarships and short courses to develop future leaders from more than 55 countries. We also awarded 11,600 scholarships and mobility grants to Australian undergraduates through the New Colombo Plan, strengthening people-to-people links and bringing to around 50,000 the number of awards made since the program’s inception in 2014.

The department places a high priority on providing a secure and effective Australian presence overseas. We are upgrading our security network to ensure the security of our staff abroad. We also began a three-year program to modernise and streamline our corporate operations. Our Post-in-a-Box—a secure communications capability for quickly setting up new or temporary diplomatic posts—was successfully deployed for the first time in Rabat. We officially opened new diplomatic posts in Funafuti, Kolkata and Shenyang, bringing to 109 the number of overseas posts through which we advance Australia’s interests, with an additional 11 managed by Austrade.

Throughout the reporting year, the department continued to build a workforce that reflects the vitality and diversity of the Australian community. An independent review found our strategy to improve gender equity had achieved strong results, with a higher number of female heads of mission than ever before and a more

inclusive organisational culture. We still seek to boost our cultural and linguistic diversity, disability and LGBTI inclusion. Under the department’s Reconciliation Action Plan, our Diplomatic Academy offered Ngunnawal language workshops to staff and reinforced Aboriginal and Torres Strait Islander cultures and heritage as part of our national identity.

The year ahead In the face of a challenging budget environment in 2019-20, the department will need to become even more efficient and productive, without compromising its efforts to prosecute Australia’s interests overseas. The capability of our workforce and our systems has at times been under strain, as we face growing and emerging challenges. In response we are focusing on agility, learning and innovation, building fit-for-purpose systems and directing our efforts where they are needed the most.

With the international system becoming more competitive, we will lead by example to help shape a stable and prosperous Indo-Pacific region. Managing our important but complicated relationship with China will be a challenge in the year ahead. We will advocate for open markets and strengthen the trade relationships that have supported global economic growth. We will bolster our neighbours’ efforts to build democratic resilience and sovereignty, and we will foster respect for international law while supporting the modernisation of the institutions that underpin cooperation. Most importantly, we will ensure Australia’s foreign policy remains agile and capitalises on our strengths as a nation to enhance our future security and prosperity.

13

Secretary’s review

Overviews

Departmental overview

The department’s purpose is to make Australia stronger, safer and more prosperous, to provide timely and responsive consular and passport services, and to ensure a secure Australian Government presence overseas.

Our 2018-19 Corporate Plan is aligned with the 2017 Foreign Policy White Paper and outlines how the department will achieve its purpose. The plan also sets out the department’s efforts to reshape itself and align its capabilities to seize opportunities and protect Australia’s interests in the face of global complexity and uncertainty.

A case in point is our new Office of the Pacific which brings together expertise across government in support of Australia’s step-up agenda for the Pacific.

In support of our ministers, the Secretary, five deputy secretaries and the head of the Office of the Pacific lead the department’s work in Australia and overseas.

We work closely with our portfolio partners, colleagues across government, business and civil society to promote and protect Australia’s interests internationally and contribute to economic growth and global stability.

This report sets out how we advanced Australia’s interests during the year. It details what we did, why we did it, the challenges we faced, the impact we made and who benefited from our efforts. In particular, this report seeks to measure our performance in relation to indicators listed against each of our seven Corporate Plan priorities (see p. 15).

Measuring policy performance is inherently difficult and the dynamic international environment only adds to the complexity. The department seeks to ensure that our assessments of policy performance are supported by verifiable evidence.

The ratings we applied in the annual performance statement represent the following:

Achieved We met our goal.

On track The activity is ongoing and we have made progress towards our goal. In some cases we qualified our rating on the basis that progress towards our broader objective was under strain.

Not on track We did not achieve our goal.

The activity is ongoing but we have not made satisfactory progress towards our goal.

14

DFAT Annual Report 2018-19

Figure 1 Corporate Plan priorities Figure 1 Corporate Plan priorities

Purpose

To make Australia stronger, safer and more prosperous, to provide timely and responsive consular and passport services, and to ensure a secure Australian Government presence overseas

* Department of Foreign Aff airs and Trade Portfolio Budget Statements 2018-19 and Portfolio Additional Estimates Statements 2018-19.

Porfolio Budget Statements Outcome 1

The advancement of Australia’s international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign, trade and international development policy priorities

Promote a stable and prosperous Indo-Pacifi c Corporate plan priority 1

PBS 1.1, 1.2, 1.3, 1.4, 1.5, 1.6 Page 21

Pursue our economic, trade and investment agenda for opportunity Corporate plan priority 2

PBS 1.1, 1.4 Page 39

Keep Australia and Australians safe and secure Corporate plan priority 3

PBS 1.1, 1.2, 1.3, 1.4 Page 53

Deliver an innovative development assistance program Corporate plan priority 4

PBS 1.2, 1.3 Page 63

Advance global cooperation Corporate plan priority 5

PBS 1.1, 1.2, 1.3, 1.4, 1.6 Page 79

Porfolio Budget Statements Outcome 2

The protection and welfare of Australians abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services in Australia and overseas

Support Australians overseas Corporate plan priority 6

PBS 2.1, 2.2 Page 91

PBS 1.1 Foreign aff airs and trade operations

PBS 1.2 Offi cial Development Assistance

PBS 1.3 Offi cial Development Assistance - multilateral replenishments

PBS 1.4 Payments to international organisations

PBS 1.5 New Colombo Plan

PBS 1.6 Public information services and public diplomacy

PBS 2.1 Consular services

PBS 2.2 Passport services

PBS 3.1 Foreign aff airs and trade security and IT

PBS 3.2 Overseas property

Porfolio Budget Statements Outcome 3

A secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth’s overseas property estate

Provide a secure and eff ective overseas presence

Corporate plan priority 7

PBS 3.1, 3.2 Page 103

15

Departmental overview

Overviews

Figure 2 Foreign Affairs and Trade Portfolio Structure as at 30 June 2019 Figure 2 Foreign Aff airs and Trade Portfolio Structure (as at 30 June 2019)

Minister for Foreign Aff airs Senator the Hon Marise Payne

Minister for Trade, Tourism and Investment Senator the Hon Simon Birmingham

Minister for International Development and the Pacifi c The Hon Alex Hawke MP

Assistant Trade and Investment Minister The Hon Mark Coulton MP

Assistant Minister for Regional Tourism Senator the Hon Jonathon Duniam

Tourism Australia

Chair, Mr Bob East

Managing Director, Mr John O’Sullivan

Export Finance and Insurance Corporation

Chair, Mr James Millar AM Managing Director and CEO, Ms Swati Dave

Australian Trade and Investment Commission

Chief Executive Offi cer, Dr Stephanie Fahey

Department of Foreign Aff airs and Trade

Secretary, Ms Frances Adamson

Australian Secret Intelligence Service

Director-General, Mr Paul Symon AO

Australian Centre for International Agricultural Research

Chief Executive Offi cer, Professor Andrew Campbell

The executive of the Department of Foreign Affairs and Trade

(L to R) Deputy Secretaries Tony Sheehan, Richard Maude, Clare Walsh, Secretary Frances Adamson, Deputy Secretaries Christopher Langman, Penny Williams PSM and Head of the Office of the Pacific, Ewen McDonald [DFAT/Linda Roche]

16

DFAT Annual Report 2018-19

Figure 3 Organisational Chart as at 30 June 2019 Figure 3 Organisational chart (as at 30 June 2019)

Services

Delivery Group (SDG)

Deputy Secretary Penny Williams PSM

Finance Division (FND)

Chief Finance Offi cer Murali Venugopal

People Division (PPD)

Chief People Offi cer Daniel Sloper

Diplomatic Academy (DAC)

Executive Director Paula Ganly

Diplomatic

Security Division (DSD)

Chief Security Offi cer Luke Williams

Australian

Passport Offi ce (APO)

Executive Director Ross Tysoe AO

Information Management & Technology Division (IMD)

Chief Information Offi cer Tim Spackman

Overseas Property Offi ce & Services (OPO)

Executive Director Kevin Nixon

Contracting & Aid Management Division (ACD)

First Assistant Secretary Beth Delaney

Protocol Branch (PRB)

A/g Chief of Protocol Pamela O’Grady

Trade, Investment and Business Engagement Group (TBG)

Deputy Secretary Christopher Langman

Offi ce of Trade Negotiations (OTN)

First Assistant Secretary George Mina

Chief Negotiator EU FTA Alison Burrows

Investment and Economic Division (IVD)

First

Assistant Secretary Ambassador for APEC Simon Newnham

A/g Chief Economist (Trade and Investment) Tony Coles

Regional Trade Agreements Division (RTD)

First Assistant Secretary James Baxter

Chief Negotiator Elizabeth Ward

Europe and Latin America Division (ELD)

First Assistant Secretary Cathy Raper

Offi ce of

the Pacifi c (OTP)*

Head of Offi ce Ewen McDonald

Pacifi c Strategy Division (PSD)

First Assistant Secretary Kathy Klugman

Pacifi c Bilateral Division (PBD)

First Assistant Secretary James Gilling

Indo-Pacifi c Group (IPG)

Deputy Secretary Richard Maude

Southeast Asia Division (SED)

First Assistant Secretary Julie Heckscher

North Asia Division (NAD)

A/g First Assistant Secretary Elly Lawson

US & Indo-Pacifi c Strategy Division (AMD)

First Assistant Secretary Philip Green OAM

South & West Asia Division (SWD)

First Assistant Secretary Lachlan Strahan

Global Cooperation, Development and Partnerships Group (GPG)

Deputy Secretary Clare Walsh

Development Policy Division (DPD)

A/g First Assistant Secretary Cate Rogers

Multilateral Policy Division (MPD)

First Assistant Secretary Justin Lee

Ambassador for the Environment Patrick Suckling

Offi ce of Development Eff ectiveness (ODE)

Assistant Secretary Robert Christie

Centre for

Health Security (CHS)

Ambassador for Regional Health Security Peter Versegi

Multilateral Development and Finance Division (MDD)

Chief Economist (Development) Chris Tinning

innovationXchange (IXC)

Chief Innovation Offi cer / Chief Scientist Sarah Pearson

Soft Power, Communications and Scholarships Division (SCD)

First Assistant Secretary Andrew Byrne

International Security, Humanitarian and Consular Group (ISG)

Deputy Secretary Tony Sheehan

Consular & Crisis Management Division (CCD)

First Assistant Secretary Andrew Todd

International Security Division (ISD)

First Assistant Secretary Amanda Gorely

Ambassador for Cyber Aff airs Tobias Feakin

Ambassador for Counter-Terrorism Paul Foley PSM

Ambassador for People Smuggling and Human Traffi cking

Bryce Hutchesson

Australian Safeguards & Non-Proliferation Offi ce (ASNO)

Director General Robert Floyd

Humanitarian, NGOs & Partnerships Division (HPD)

First Assistant Secretary Jamie Isbister

Middle East & Africa Division (MAD)

First Assistant Secretary HK Yu PSM

Legal Division (LGD)

Chief Legal Offi cer James Larsen

Secretary Frances Adamson

Executive Branch (EXB)

Assistant Secretary Chief Risk Offi cer Suzanne McCourt / Angela Robinson

* Offi ce of the Pacifi c is also responsible for enhancing whole-of-government coordination in the Pacifi c

Strategic Policy, Contestability and Futures Branch (PLB)

Assistant Secretary Keith Scott

Internal Audit Branch (AUB)

Chief Auditor Rachel Harris

17

Departmental overview

Overviews

The cable-laying vessel, the Ile de Brehat, commencing the Coral Sea cable lay in Honiara [DFAT/Qoriniasi Jr. Bale]

Report on performance

19

20

DFAT Annual Report 2018-19

School students from Bishop Epalle School in Honiara welcome Prime Minister Scott Morrison [DFAT/Qoriniasi Jr. Bale]

Report on performance

Promote a stable and prosperous Indo-Pacific

21

Promote a stable and prosperous Indo-Pacific

The Indo-Pacific is our home and the region that will have the greatest impact on Australia’s future prosperity and security. It encompasses our major trading, strategic and development partners.

As the engine of global growth, the Indo-Pacific offers unparalleled opportunity. Australia is well placed to continue to benefit from the region’s economic dynamism, which supports Australian jobs and standards of living. The economies of Australia and our key regional trade and investment partners are highly complementary. We have extensive and growing connections with the region, through business, education, tourism and migration.

At the same time, the Indo-Pacific is undergoing a profound transition, as economic and strategic weight shifts. Competition over the character of the future regional order continues to sharpen. Australia will need to navigate a more complex and contested region to maximise our economic opportunity and maintain our security.

The 2017 Foreign Policy White Paper identified no more important objective than ensuring the Indo-Pacific evolves peacefully, without an erosion of the fundamental principles on which regional prosperity and cooperation are based. The White Paper also emphasised the importance to Australia of stability and economic progress in Pacific island countries and Timor-Leste.

In 2018-19 the department designed and delivered a range of programs and initiatives to advance the Indo-Pacific agenda outlined in the White Paper. We strengthened Australia’s cooperation with partners, bilaterally and in small groups, to support our vision for an open, inclusive and prosperous region. We worked to reinforce regional architecture, including by promoting greater collaboration on economic and security issues.

The department is delivering on the Prime Minister’s vision for a new chapter in Australia’s relationships with our Pacific island neighbours. Through the Pacific Step-up—and as the region’s leading development assistance partner— we are working closely with Pacific communities to support their economic prosperity ambitions.

Advancing Australia’s interests in the Indo-Pacific

Performance measures How we rate our performance*

The department’s efforts in the Indo-Pacific advance the interests of Australia and Australians.

On track but progress towards advancing Australia’s interests in the Indo-Pacific is under strain

The step-up in Pacific and Timor-Leste engagement supports stronger and more resilient economies, capability and regional security.

On track

Source: Corporate Plan p. 10-11, PBS program 1.1 p. 28 | Funding: PBS programs 1.1, 1.2, 1.3 and 1.4

* Our assessment is informed by economic and trade data, tracking our implementation of government decisions, agreements with foreign governments, outcomes from dialogues with foreign governments and development results from the department’s Aid Program Performance Reports.

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DFAT Annual Report 2018-19

Our performance

We assess that the department’s activities in 2018-19 advanced Australia’s prosperity and security and helped build our influence in a more competitive region.

It is more difficult to measure our achievement in the past year against our longer-term objective of shaping an open, inclusive and prosperous Indo-Pacific, given shifts in the regional order will play out over a long time period. It is clear however that the region faces significant headwinds, including intensifying strategic competition, trade differences that are disrupting economic growth and greater use of

power rather than rules to pursue national interests. Australia’s foreign policy must be active and agile, and draw on all elements of our national power to advance our interests.

The step-up in Pacific and Timor-Leste engagement is also a step-up for the department. During this performance year, we made significant progress. We launched a series of innovative programs that are making a difference to our neighbours. The overall marker of our success in ‘stronger and more resilient economies, capability and regional security’ in the Pacific and Timor-Leste will take some time to measure. On balance, we rate our performance under this measure as ‘on track’.

Minister for Foreign Affairs Senator Marise Payne and her counterpart US Secretary of State Michael Pompeo discussing the broad range of interests in our bilateral relationship at a meeting in Washington [US State Department/Michael Gross]

Engaging the United States

Australia’s alliance with the United States is the bedrock of our security. We enjoy a mutually beneficial partnership anchored in shared interests and values. We contribute significantly to each other’s prosperity— two-way investment reached $1.7 trillion in 2018 and the United States ranks as Australia’s third-largest trading partner.

Australia benefits from deep US engagement in the economic and security affairs of the Indo-Pacific. During the year the department led efforts to bring the Indo-Pacific to the centre of our alliance cooperation and to identify practical ways to address shared regional challenges. We led negotiations on the Indo-Pacific joint work plan—adopted at AUSMIN in July 2018—which sets out a clear roadmap for collaboration in the region.

In November we negotiated and signed a memorandum of understanding with US and Japanese agencies to operationalise our trilateral partnership for infrastructure

investment in the Indo-Pacific. In April trilateral partners undertook the first joint mission in the region—to Papua New Guinea—identifying several infrastructure projects to advance with the Papua New Guinea Government and the private sector.

Through frequent advocacy across the US administration, we positioned Australia as an informed and trusted voice on Indo-Pacific issues as the US approach to the region evolves. We organised four successful portfolio minister visits to the United States, facilitated the Prime Minister’s meeting with President Trump at the G20 summit in June 2019 and provided detailed policy advice on the Indo-Pacific to US officials.

The department secured ongoing tariff exemptions for Australian steel and aluminium exports. Critical to this was our comprehensive advocacy on the mutual benefits of our commercial relationship and of our free trade agreement, in effect since 2005.

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Promote a stable and prosperous Indo-Pacific

Report on performance

Minister for Foreign Affairs Senator Marise Payne with State Councillor and Foreign Minister Wang Yi at the conclusion of the 5th Australia-China Foreign and Strategic Dialogue at Diaoyutai State Guesthouse Beijing [DFAT/Chris Crerar]

Working with China

Australia’s relationship with China is underpinned by our comprehensive strategic partnership and free trade agreement. China is our largest trading partner, with two-way trade increasing by 17 per cent to $214.6 billion in 2018. Our communities are closely connected— Australia is proud to have hosted 205,000 Chinese students in 2018, a new record.

The department organised and supported ministerial engagements with China during the year. Australia’s strong showing at the Shanghai trade expo in November 2018—with the Trade Minister leading a delegation of more than 200 firms—increased the visibility and reach of Australian business into the Chinese market. The Foreign Minister’s subsequent visit to Beijing in November enhanced bilateral understanding and highlighted our cooperation on regional priorities. The Prime Minister met with the Chinese Premier at the East Asia Summit in November 2018. He also held discussions with the Chinese President at the APEC summit in November and in the margins of the G20 summit in June.

We are now delivering new mechanisms for bilateral engagement, including the National Foundation for Australia-China Relations, announced in March 2019. The foundation will provide practical support and advice to government, private sector and community

organisations in Australia on developing links with Chinese counterparts. In April 2019 the department opened a new consulate-general in Shenyang—our fifth diplomatic post in mainland China—providing new opportunities for Australian businesses in a major commercial and industrial hub.

The department also advocated for Australia’s interests in areas of disagreement with China. We expressed our concerns about the human rights situation in the Xinjiang Uyghur Autonomous Region, and called on China to protect fully the right of individuals to practice their religion free from government interference. We consistently raised Australia’s longstanding position that disputes in the South China Sea should be resolved peacefully in accordance with international law.

While working to ensure differences on some issues did not overshadow the many positives in our bilateral relationship with China, some elements of our agenda over the year in review faced difficulties. Australian coal exports experienced delays clearing some Chinese ports: the department supported the government in advocating the importance of non-discriminatory treatment of Australian trade. We also urged China to conclude its investigations into Australia’s barley exports swiftly and in a manner consistent with WTO rules.

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DFAT Annual Report 2018-19

Working with major Indo-Pacific democracies

The major Indo-Pacific democracies of Japan, India, Indonesia and the Republic of Korea are of first-order importance to Australia. We are pursuing new economic, strategic and security cooperation with these countries—bilaterally and in small groupings—to support a favourable regional balance. Australia’s cooperation with Japan—our special strategic partner and second-largest trading partner— continued to mature during the year, guided by our shared values and interests, and the close alignment of our priorities across the Indo-Pacific.

The department deepened high-level engagement to address shared strategic interests, including through the eighth Japan-Australia 2+2 Foreign and Defence Ministerial Consultations in October. We worked with the Department of Defence to advance negotiations on a bilateral agreement to facilitate defence exercises and operations. We also deepened officials’ exchanges on shared challenges and opportunities in the Indo-Pacific.

The department laid the groundwork for the inaugural Ministerial Economic Dialogue in Tokyo in July 2018. This established a new framework for the bilateral economic relationship and for coordinating our approaches to regional economic integration, including expanding the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and finalising the Regional Comprehensive Economic Partnership (see p. 43). We also provided policy advice and support for Prime Minister Abe’s historic visit to Darwin in November 2018 and for the subsequent leaders meeting in the margins of the G20 summit in Osaka in June.

Indonesia is vitally important to Australia as a close neighbour and a growing economic and strategic power. Over decades, we have invested in closer cooperation to enrich our political and economic relationship and to tackle common challenges.

The department led the conclusion of two landmark agreements with Indonesia during the year. Our comprehensive strategic partnership—announced during the Prime Minister’s visit to Indonesia in August—

commits both sides to a more ambitious shared agenda, bilaterally and in the Indo-Pacific. Our comprehensive economic partnership agreement, signed in March 2019, will allow most Australian exports to enter Indonesia duty-free, improve conditions for our service providers and encourage more two-way investment.

Australia and Indonesia are true regional partners. We co-chair security meetings like the Bali Process and the sub-regional meeting on counter-terrorism, necessary for coordinating responses to transnational threats including people smuggling and terrorism. The Foreign Minister’s attendance at the 11th Bali Democracy Forum demonstrated Australia’s strong support for Indonesia’s international advocacy for the principles of democracy.

Our development cooperation is targeting areas of strategic importance for the bilateral relationship. We partnered with Indonesian agencies to develop infrastructure, skills and institutions to promote economic growth and stability. We supported 15 Australian Government agencies to work alongside Indonesian counterparts to advise and share Australia’s experience on key reforms. Our advice strengthened Indonesia’s international anti-money laundering and counter-terrorist financing standards.

India sits in the front rank of Australia’s bilateral and regional partnerships and is crucial to the long-term security and prosperity of the Indo-Pacific.

We supported a higher tempo of bilateral engagement with India in 2018-19, including the first state visit by an Indian President in November, and the opening of the new Australian Consulate-General in Kolkata in March. The Foreign Minister’s address to India’s signature strategic conference, the Raisina Dialogue, in January 2019, deepened India’s appreciation of Australia as an Indo-Pacific partner.

We continued to build the economic relationship and to support Australian industry on trade issues, commencing WTO dispute settlement proceedings with Brazil and Guatemala against India’s sugar subsidies, which are distorting world markets.

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Promote a stable and prosperous Indo-Pacific

Report on performance

Implementing the India Economic Strategy Over the next 20 years, no single market will offer more growth opportunities for Australian business than India. The department supported Peter Varghese AO to produce an India Economic Strategy, released in July 2018, which sets out a long-term roadmap for growing the economic relationship.

The Prime Minister announced the government’s endorsement of the report, including its ambitious goals for the India relationship by 2035:

§ lifting India into Australia’s top three export markets

§ making India the third-largest destination in Asia for Australian outward investment

§ bringing India into the inner circle of Australia’s strategic partnerships

§ forming people-to-people ties as close as any in Asia.

Early outcomes include a new scholarship program for Indian students, training on biosecurity to improve the flow of agricultural products, air services arrangements that allow more direct flights and the launch of the Undiscover Australia tourism campaign.

The department promoted economic opportunities in India, including through a roadshow engaging business, state governments and the Indian diaspora around Australia, and board meetings with ASX 200 companies. We co-sponsored an India business summit hosted by the Australian Financial Review in November 2018, which was attended by 230 senior business leaders and media commentators.

The Indian Government has commissioned a counterpart strategy for Australia which will be completed in late 2019.

Australia continues to build on its mature economic relationship with the Republic of Korea—our fourth-largest trading partner—by pursuing a higher level of ambition for regional cooperation.

We engaged in high-level discussions on the regional security environment, including on North Korea, by hosting the Senior Officials 2+2 Strategic Dialogue in July 2018. In our high-level consultations on development in March, we identified further opportunities to support development in Southeast Asia and the Pacific and agreed to a secondment exchange between our innovation areas.

The Korea-Australia Free Trade Agreement (KAFTA) celebrated its fourth anniversary in December and a sixth round of tariff cuts in January. Thanks to KAFTA, more than 99 per cent of Australia’s goods exports to the Republic of Korea are eligible to enter duty-free or with preferential access. As of 2017, over 92 per cent of eligible two-way trade between Australia and the Republic of Korea used FTA preferences.

Stepping up in the Pacific and Timor-Leste

The prosperity, stability and security of the Pacific is at the forefront of Australia’s foreign policy. Building on our longstanding partnerships for economic and human development in the region, the department is coordinating the whole-of-government design and implementation of the Pacific Step-up, which will enhance our efforts to tackle the unique needs of Pacific island countries.

In 2018-19 the department delivered Australia’s highest ever contribution to Pacific development of $1.2 billion, providing high-quality, sustainable support in line with Pacific priorities. New development partners are also increasingly engaged in the region, creating a more complex backdrop to our efforts to support Pacific aspirations, and promote a secure, stable and prosperous region.

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DFAT Annual Report 2018-19

The department’s response to these challenges is not business as usual. Establishing the Office of the Pacific with more staff—including from 10 agencies across government—is a major shift in how we engage with the Pacific. The office has driven greater whole-of-government coordination and renewed focus on our Pacific engagement, enabling us to work more closely and effectively with our Pacific partners.

To support these efforts, we continued to advance Pacific regionalism, led by the Pacific Islands Forum (PIF), including to secure a stronger collective Pacific voice on the international stage. In September we negotiated with Pacific partners on a new regional security declaration—the Boe Declaration—which established an expanded concept of regional security and set the framework for renewed cooperation. Our assistance for Papua New Guinea’s hosting of APEC in 2018, including the leaders meeting in November, helped PNG showcase our region on the global stage.

Our relationship with New Zealand remains our closest and most comprehensive, and the department worked closely with our counterparts to coordinate the Pacific

Step-up with New Zealand’s ‘Pacific Reset’. Cooperation with New Zealand in the aftermath of the March 2019 Christchurch terror attacks demonstrated the strength of our relationship and joint commitment to combat terrorism.

Reaffirming the importance of the Pacific, the department facilitated a significant increase in high-level engagement between Australia and Pacific island countries during the year—including 35 ministerial visits—with landmark visits by the Prime Minister to Papua New Guinea, Vanuatu, Fiji and Solomon Islands. These significantly elevated our bilateral relationships and underscored the depth of Australia’s commitment to the region.

The opening of Australia’s high commission in Tuvalu in February (our 14th post in the Pacific) further bolstered our diplomatic network, already the largest in the region of any country. New posts planned in the Cook Islands, Niue, French Polynesia, Palau and the Republic of the Marshall Islands will help further improve our relationships across the Pacific. The department is also designing and implementing new programs to enhance our education, sports and church links, bringing our people even closer together.

Pacific workers in regional Australia Tebeau Tioan is an aged care worker in Bundanoon, New South Wales, and one of 11 women from Kiribati employed in 2018 by an Australian aged care providers through the Pacific Labour Scheme.

Residents and staff refer to the i-Kiribati workers as hard-working, caring and genuine, with an inherent respect for older people.

Aged care provider Warrigal was one of the first approved employers on the Pacific Labour Scheme, employing the workers from Kiribati when no Australians were available.

The workers received training before leaving Kiribati and graduated with a Certificate III in Individual Support (Ageing, Home and Community) delivered by the Australia Pacific Training Coalition.

The Pacific Labour Scheme offers visas of up to three years for low to semi-skilled

workers. In an industry like aged care, the longer-term visa allows stable ongoing relationships between residents and carers.

The scheme is providing workers from the Pacific with skills, experiences and income they can take home to their countries and helping Australian businesses to solve labour shortages.

I-Kiribati personal care worker Tebeau Tioan at Warrigal Aged Care in Bundanoon, with resident Nelly Lawrence [Karen Young/Pacific Labour Facility]

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Promote a stable and prosperous Indo-Pacific

Report on performance

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Figure 4 Pacifi c highlights 2018-19

A record $1.2 billion development assistance to the Pacifi c, delivered by DFAT

Australian Infrastructure Financing Facility for the Pacifi c designed to deliver $2 billion in loans and grants for infrastructure projects

Coral Sea cable to deliver high speed internet to Papua New Guinea and Solomon Islands

More than 12,200 jobs for Pacifi c and Timor-Leste workers through the Seasonal Worker Programme and Pacifi c Labour Scheme

Designed new programs to enhance links through sport, education and churches

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Current posts

New posts planned

28

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Figure 4 Pacifi c highlights 2018-19

A record $1.2 billion development assistance to the Pacifi c, delivered by DFAT

Australian Infrastructure Financing Facility for the Pacifi c designed to deliver $2 billion in loans and grants for infrastructure projects

Coral Sea cable to deliver high speed internet to Papua New Guinea and Solomon Islands

More than 12,200 jobs for Pacifi c and Timor-Leste workers through the Seasonal Worker Programme and Pacifi c Labour Scheme

Designed new programs to enhance links through sport, education and churches

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Pacific Ocean

Papua New Guinea

Solomon Islands

New Caledonia

Timor-Leste

Vanuatu

Samoa

Tuvalu

Kiribati

Tonga

French

Polynesia

North Pacific Ocean

Cook Islands

Palau

Federated States of Micronesia

Nauru

Fiji

Marshall Islands

Niue

Coral Sea

Tasman Sea

South China Sea

Coral Sea cable

New Zealand

Current posts

New posts planned

Report on performance

29

As part of Australia’s commitment to enhancing regional prosperity and economic opportunities, the department rolled out the new Pacific Labour Scheme to nine Pacific island countries (Fiji, Kiribati, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu) and Timor-Leste. In its first year, 50 employers were approved to recruit through the scheme and 203 Pacific workers were employed in Australia.

More than 12,000 Pacific and Timor-Leste workers were employed in Australia in 2018-19 through the Seasonal Worker Programme. Each worker remitted on average $8,850 to their home country for each work placement. These demand-driven programs helped Australian businesses address labour shortages in rural and regional areas, where no Australian workers were available. They also provided a significant boost for Pacific economies and communities.

The Pacific Labour Facility, established in 2018, supports Australian businesses to use the Pacific Labour Scheme, helps source countries to increase the number of quality workers coming to Australia and provides vital pastoral care support to workers while in Australia.

To support transformative infrastructure development across the Pacific and Timor-Leste, the department designed the $2 billion Australian Infrastructure Financing Facility for the Pacific (AIFFP). The facility will support the infrastructure priorities of our neighbours, including telecommunications, energy, transport and water. We expect that each infrastructure project financed by AIFFP will involve complex risks that will test the department’s capability on an ongoing basis. To ensure the department is equipped to deliver the AIFFP we are building staff capacity— including through targeted training, contracting expertise, and working with multilateral development banks and others with established systems for loans.

New legislation passed during the year enables Export Finance Australia (formerly Efic) to help more Australian businesses capitalise on commercial opportunities in the Pacific. These new measures build on our significant contribution to infrastructure across the region, including the Coral Sea cable project with Papua New Guinea and Solomon Islands.

High-speed internet for Papua New Guinea and Solomon Islands The people of Papua New Guinea and Solomon Islands will receive next generation internet connectivity when a submarine cable system is completed by the end of 2019.

The Coral Sea cable system will link Sydney, Port Moresby and Honiara, and connect four provinces within Solomon Islands.

The governments of Papua New Guinea and Solomon Islands are jointly contributing up to one third of the costs, with Australia to fund the majority of the project as a significant

investment in the future economic growth and prosperity of our region.

The department engaged Vocus Pty Ltd as the project manager to finalise the marine survey, the manufacture and installation of 5,500km of cable, and civil works in Australia, Papua New Guinea and Solomon Islands.

According to the World Bank, improving internet access and connectivity in the Pacific could increase the region’s gross domestic product by USD5 billion by 2040 and create an extra 300,000 jobs.

The department facilitated Australia’s ratification of the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) in December—a significant milestone of greater regional economic integration. PACER Plus will provide commercial opportunities for exporters and investors across a range of sectors, and the department is supporting Pacific countries to complete arrangements to bring the agreement into force.

Security and stability are essential foundations for economic prosperity. The department responded to Pacific leaders’ calls for better information sharing to tackle security threats (such as illegal fishing, people smuggling and narcotics trafficking) by developing new regional coordination and capacity mechanisms. This includes the Pacific Fusion Centre and Australia Pacific Security College, which have commenced working with the region to strengthen security responses.

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DFAT Annual Report 2018-19

As a region of large ocean states, the security of maritime areas is vitally important to Pacific island countries for cultural identity, food security and economic development. The department has created the Pacific Maritime Boundaries Section in the Office of the Pacific to help Pacific island countries establish their maritime zones. We are also supporting major Department of Defence-led investments in Papua New Guinea, Fiji and Vanuatu to strengthen their security, sovereignty and capacity.

Climate change is a key priority for our immediate region and the department is rolling out its four-year, $300 million package to support Pacific climate and disaster resilience. A further $500 million over five years has been pledged for the Pacific, starting in 2020-21. We are also mainstreaming climate and disaster resilience into Australia’s aid investments across the Pacific, including through Pacific Step-up initiatives such as the AIFFP.

We are committed to supporting our Pacific family in times of crisis. The department coordinated Australia’s assistance to Vanuatu to evacuate and resettle the residents of Ambae Island during major volcanic eruptions, and supported

Solomon Islands to prevent a major oil spill from devastating Rennell Island and its UNESCO-listed world heritage site.

This support builds on our longstanding commitment to human development in the Pacific, which is reflected in our record development contribution in 2018-19. We are continuing to focus on gender equality, health and governance, and redressing persistent challenges that undermine national and regional security. See p. 65 for more detail on our development program in the Pacific.

The Foreign Minister’s visit to Timor-Leste in July 2018 reinforced Australia’s commitment to revitalising our partnership, following the signing of the maritime boundary treaty. Both governments worked closely on the transitional arrangements needed to bring the treaty into force and to draft the implementing legislation. The high-level visits have continued, with Australia hosting a third of Timorese parliamentarians in 2019. In March 2019 Foreign Minister Payne signed a memorandum of understanding which welcomed Timor-Leste into Australia’s new Pacific Labour Scheme.

Working with Southeast Asia

Southeast Asia lies at the heart of the Indo-Pacific and at the centre of our efforts to promote regional stability and prosperity. As a longstanding partner in Southeast Asia, Australia has increased efforts to ensure we remain a leading economic, development and strategic partner for the region.

With the Department of Defence, we hosted the joint ministerial committee meeting with Singapore, where ministers welcomed progress in implementing our comprehensive strategic partnership. We supported multiple visits to Singapore by the Prime Minister as well as foreign and trade ministers to catalyse new areas of cooperation, including on digital trade.

A Timorese worker picking berries at Hillwood Berries in Tasmania as part of the Seasonal Worker Programme [Pacific Labour Facility/Karen Young]

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Thai cave rescue When 12 Thai boys and their soccer coach were trapped in a flooded cave in northern Thailand in mid-2018, the department was quick to respond.

Working with the Australian Federal Police, Defence and Emergency Management Australia, we coordinated the Australian Government’s response to support the rescue. This included the rapid deployment of Dr Richard Harris, an internationally recognised cave diver and anaesthetist, and his long-term dive partner, Dr Craig Challen, as members of the Australian Medical

Assistance Team. We also deployed three officers from our Crisis Response Team to provide extra resources to support this high-profile and complex operation. The team worked closely with Thai authorities and international counterparts.

Thailand recognised the important role played by Dr Harris and Dr Challen with the conferral of the Most Admirable Order of the Direkgunabhorn Award. The Thais regard Australia’s contribution to this rescue as one of the most significant milestones in our bilateral relationship in recent years.

Officers from the Australian Embassy Bangkok and our Humanitarian Branch involved in the Australian efforts to assist Thai authorities with the rescue from Tham Luang Cave [DFAT]

We are strengthening Australia’s partnership with Malaysia as it pursues an ambitious reform agenda. Through two-way visits, new policy dialogues and Australian capacity building, we have deepened links between our democratic institutions. During secretary-level talks, we promoted Australia’s economic and strategic priorities and discussed the next phase of regional cooperation under our strategic partnership.

The Foreign Minister’s visit to Vietnam in June added further momentum to our new strategic partnership and deepened discussion of our converging interests in the Indo-Pacific. The first iteration of our Oceans Dialogue advanced our cooperation on maritime governance and international law. Our development program is helping Vietnam implement the Comprehensive and

Progressive Agreement for Trans-Pacific Partnership, providing more opportunities for exporters in both countries.

The department is supporting Myanmar’s long-term democratic and economic transition, including through our development assistance. We continued to work with Myanmar, Bangladesh and other partners towards a long-term and durable solution to the Rohingya crisis. The Australian Government condemned atrocities committed in Rakhine State and other parts of Myanmar, and imposed targeted financial sanctions and travel bans on five members of the Myanmar military. We organised the Foreign Minister’s visit to Myanmar in December, where she advocated for access by UN agencies to affected areas and for the needs of displaced people.

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DFAT Annual Report 2018-19

We are working with Thailand to advance its priorities as ASEAN chair in 2019, including the conclusion of RCEP negotiations. We delivered a memorandum of understanding on cyber and digital cooperation, which was signed by the Foreign Minister in Bangkok in January. We are also working together to tackle cross-border challenges in the Mekong—Australia accepted Thailand’s invitation to become an Ayeyawady-Chao

Phraya-Mekong Economic Cooperation Strategy Development Partner.

The department worked closely with the Philippines during the year to build effective counter-terrorism skills, assist civilians displaced by conflict and to support the transition to a new autonomous regional government in Muslim Mindanao.

Canberra fellowships The Canberra Fellowships Program— launched in September—brings together current and emerging leaders from the Indo-Pacific to deepen their understanding of Australian perspectives and expertise in their field of work. Participants also learn about Australian people and our values. During the year, we designed and delivered 14 visits involving 93 participants from 20 countries. Each visit focused on a particular theme, from challenges facing the Indo-Pacific to managing telecommunications sectors.

Highlights included visits by:

§ the Timor-Leste Foreign Affairs, Defence and National Security Parliamentary Committee, which focused on maritime issues

§ senior representatives from Cambodia, Laos, Myanmar, Vietnam, Thailand and the Mekong River Commission. This group engaged with Australian experts on cross-boundary water management, as well as broader energy governance

§ emerging female leaders from Papua New Guinea, focusing on women in leadership and building networks with the private sector, government and civil society in Australia.

We presented a diverse and contemporary experience of Australia. Women had a strong presence at meetings and events, held across the country, and visitors engaged with Indigenous leaders and participated in Indigenous cultural events.

Working with South and West Asia

We promote stability, economic growth and regional cooperation in South and West Asia—as a significant part of efforts in the Indo-Pacific to advance Australia’s interests.

Australia maintained support for the NATO-led mission in Afghanistan to train, advise and assist Afghan security forces so that Afghanistan can defend itself and its people from terrorism. The department also responded to severe food and water shortages, working with development and humanitarian partners to provide food packages, and consulting with Afghan ministries on longer-term solutions. This is part of our long-term efforts to promote stability, security and prosperity in Afghanistan.

We were quick to assist Australian citizens and the Sri Lankan Government after terror attacks in April. This included coordinating support from the Australian Federal Police

to investigate the attacks and assisting to strengthen security arrangements at Sri Lanka’s parliament. We also continued our close cooperation to counter people smuggling.

Australia supported the Maldives to enter the Indian Ocean Rim Association following elections in September. We held inaugural senior officials talks with Nepal to build cooperation on education services, tourism, development priorities and regional stability.

In Bangladesh we provided substantial humanitarian support to address the needs of nearly one million displaced Rohingya, amid the largest humanitarian crisis in our region.

We advocated consistently at senior levels on behalf of a Pakistani Christian sentenced to death for blasphemy in Pakistan. She left the country in May after her conviction was overturned.

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Building regional collaboration

Regional architecture is taking on greater significance for Australia as the rules and norms that have underpinned stability in the Indo-Pacific come under greater pressure.

Australia is a strategic partner of ASEAN, which sits at the centre of our vision for the Indo-Pacific. By progressing the 15 initiatives from the 2018 ASEAN-Australia special summit, we are supporting Southeast Asia’s collective capacity in areas such as regional economic integration and counter-terrorism. We also developed new initiatives, announced by the Prime Minister in November, to support partners’ sovereignty and resilience in the areas of maritime security, economic governance and infrastructure, and our Greater Mekong Water Resources Program.

We helped strengthen the East Asia Summit (EAS) as the Indo-Pacific’s premier political and security forum. At the summit in November 2018, leaders adopted an Australian-initiated statement committing regional countries to expand cooperation on cyber security. In early 2019 Australia and Malaysia hosted an EAS seminar to increase understanding of—and support for—international law in the context of maritime security.

We are working with Pacific partners through the Pacific Islands Forum to advance the development, security and foreign policy priorities of the Pacific. The department is also leading whole-of-government efforts to strengthen the security and stability of the Indian Ocean region, including through the Indian Ocean Rim Association (IORA). We are helping to build IORA’s architecture, encouraging a sharper focus on maritime safety and security, and co-chairing meetings on women’s economic empowerment and trade modernisation.

Alongside our multilateral efforts, the department helped strengthen minilateral groupings that support the regional vision for a secure and prosperous Indo-Pacific.

Through cooperation under our trilateral strategic dialogue with Japan and the United States, we supported Southeast Asian countries to address maritime security and safety challenges, and increased our cooperation on sustainable infrastructure. Our engagement and collaboration on regional issues with India, Japan and the United States deepened through quadrilateral consultations.

Maritime security

As a major trading nation surrounded by three oceans, Australia’s security and prosperity rely on an open, stable and rules-based maritime domain. With the region’s seas becoming more congested and contested, we are stepping up efforts to build the capacity of regional partners to address challenges such as terrorism, people smuggling, maritime safety and illegal fishing.

We are reinforcing and increasing our longstanding support to Pacific island countries to define their maritime zones and secure their maritime rights.

In Southeast Asia we are delivering a new maritime cooperation package that will build countries’ resilience in their maritime domains, helping them to protect their sovereignty and sustain crucial livelihoods. Our diplomatic engagement has promoted adherence to international law, particularly the United Nations Convention on the Law of the Sea, maritime safety and respect for freedom of navigation and overflight, including in the South China Sea.

We worked closely with the Department of Defence to ensure the success of Indo-Pacific Endeavour in 2019—the largest peacetime deployment of Australian Defence Force personnel to South and Southeast Asia. Australian naval vessels called into ports in Sri Lanka, India, Malaysia, Thailand, Vietnam, Singapore and Indonesia, better preparing us to work together in the future.

34

DFAT Annual Report 2018-19

Infrastructure investment

The Indo-Pacific has a substantial need for infrastructure—amounting to $26 trillion from 2016 to 2030 according to Asian Development Bank estimates. Meeting this need in a sustainable way will help drive economic growth and stability across the region—vital to Australia’s prosperity. The department is working to ensure regional countries have access to a range of sources of infrastructure financing and can make well-informed investment choices.

To support this, the department is designing and implementing initiatives— and establishing new infrastructure partnerships—that will significantly boost our contribution to infrastructure development in the Indo-Pacific. These include:

• The Australian Infrastructure Financing Facility for the Pacific —a new loan and grant facility to support development of high-priority economic infrastructure in Pacific island countries and Timor-Leste

• The Southeast Asia Economic Governance and Infrastructure Initiative—a multi-country facility to support good government policy and provide technical advice on economic reform and infrastructure decision-making

• The South Asia Regional Infrastructure Connectivity initiative— to promote investment in high-quality infrastructure that better links the economies of South Asia

• The Australia-Japan-United States Trilateral Infrastructure Partnership—to cooperate with regional governments and the private sector in support of projects that adhere to international standards and principles

• The Australia-Japan-United States- New Zealand PNG Electrification Partnership—to help Papua New Guinea with its goal of connecting 70 per cent of its population to electricity by 2030.

Building and maintaining the capabilities required to deliver these programs to a high standard will continue to be a major focus of the department’s risk management strategy.

Responding to the threat posed by North Korea

Australia remains committed to maintaining pressure on North Korea until it takes concrete steps towards complete, verifiable and irreversible denuclearisation as set out in UN Security Council resolutions.

In 2018-19 we continued implementing United Nations Security Council and Australia’s autonomous sanctions against North Korea. We conducted regular advocacy on sanctions enforcement with Southeast Asian countries, and worked with New Zealand, the United States and Japan to build Pacific capacity on sanctions implementation.

We also supported the Department of Defence’s deployment of maritime patrol aircraft to Japan, as well as a naval vessel to the region, to monitor and deter ships evading North Korea sanctions. We followed up with the states where vessels of concern were registered.

35

Promote a stable and prosperous Indo-Pacific

Report on performance

Building relationships through the New Colombo Plan Under the New Colombo Plan (NCP) the department is supporting thousands of young Australians to study and undertake internships in the Indo-Pacific. We are building institutional links and developing

connections for a new generation of leaders to draw on in their future careers—growing cultural understanding and contributing to stability and prosperity in the Indo-Pacific.

Performance measure How we rate our performance*

New Colombo Plan engagement delivers enduring people-to-people, institutional and business links.

On track

At least 10,000 Australian undergraduates supported to study in the Indo-Pacific region.

Achieved

NCP participants build relationships in the region and promote the value of the NCP experience. On track

Universities, the private sector and partner governments support implementation of the NCP. On track

Alumni are engaged through networks that foster professional development and ongoing connections with the region. On track

Source: Corporate Plan p. 11, PBS program 1.5 p. 33 | Funding: PBS program 1.5

* Our assessments are informed by an independent evaluation of the New Colombo Plan, an analysis of our NCP and alumni databases, surveys of participants, and participation by and feedback from universities, business and partner governments.

Our performance

An independent evaluation of the NCP commissioned this year found that in its first five years, the initiative had ‘turbo-charged’ the number of Australian university students studying and doing internships in the Indo-Pacific. The NCP has provided awards for around 50,000 students to study overseas, and the evaluation confirmed that the initiative is growing a cohort of alumni with valuable regional experience and networks.

In 2018-19 the department awarded 11,660 NCP scholarships and short-term grants. Forty Australian universities and more than 300 private sector organisations are now participating, and are central to implementing the program and its success in delivering strong institutional, business and people-to-people links.

We have been working to increase the diversity of students and the range of host locations. This year—for the first time— scholarships were awarded for Cook Islands, French Polynesia and Samoa, and short-term grants for Niue and French Polynesia. In

the 2019 scholarship round, five per cent of students are Indigenous—up from less than one per cent in previous years and three times the percentage of Indigenous domestic university students. A total of 21 per cent of NCP students identify as coming from a lower socio-economic background, 17 per cent are the first in their family to attend university and 30 per cent are from regional Australia.

Australian businesses are increasingly recognising the value of the program and providing new opportunities for work experience. Five businesses provided sponsorship support for eight NCP scholarships in 2019, up from four scholarships the year before. More than 30 industry leaders with Indo-Pacific connections promoted the program as NCP business champions. In July global law firm King & Wood Mallesons co-hosted the first NCP industry symposium for business, government and universities on preparing legal graduates for international careers.

The department has established a growing community of active NCP alumni who

36

DFAT Annual Report 2018-19

promote the program. All states and territories now have alumni programs— with the launch of the initiative in the Northern Territory in July—as well as alumni ambassadors to promote the program in their universities and communities. The department partners with Asialink Business to deliver networking and development opportunities, and more than 1,900 alumni have taken part. There were 3,196 members

of the NCP alumni LinkedIn group during the year, up from 2,000 the year before, reflecting a strong and engaged alumni cohort.

Feedback is positive from governments in the region, universities, business and institutions. Surveys confirm 99 per cent of NCP scholars and 94 per cent of short-term students believe they are better prepared to engage with the Indo-Pacific after their NCP experiences.

Advising and supporting our ministers

Performance measure How we rate our performance*

High level of satisfaction of ministers and key stakeholders with the quality and timeliness of advice, briefing and support in relation to Australia’s international objectives.

On track

Source: Corporate Plan p. 10, PBS program 1.1 p. 29 | Funding: PBS program 1.1

* Our assessment is informed by a survey of portfolio ministers’ offices, surveys of stakeholders for the department’s internal divisional business reviews and regular feedback from our ministers and stakeholders.

Maldives 122

Sri Lanka 687

India 5,492

Pakistan 1

Nepal 1,582

Bangladesh 264

Bhutan 400

Mongolia 240

ASEAN

(excluding Indonesia) 13,539

South Korea 1,637

Japan 3,718

Indonesia 7,619

Palau 60

Papua

New Guinea 261

Solomon Islands 675

Nauru 10 Kiribati

87

Vanuatu 712

New Caledonia 209

Tuvalu

82

Fiji 1,448

Samoa 417

Tonga 160

China 7,075

Timor-Leste 755

Cook Islands 185

Taiwan 672

French Polynesia 26

Niue 2

FS

Micronesia 1

Hong Kong SAR 1,829

Figure 5 Five years of the New Colombo Plan — scholarship & mobility grants 2014-2019

49,967

Total scholarships and mobility grants awarded

37

Promote a stable and prosperous Indo-Pacific

Report on performance

Our performance

In 2018-19 the department arranged 52 visits for our four portfolio ministers to 39 countries for a combined duration of 247 days. We arranged travel logistics, identified strategic objectives, prepared briefs and speeches, and managed meetings and events.

We worked with the Department of the Prime Minister and Cabinet to support 10 prime ministerial visits to 12 countries. We worked across government to support visits by the Governor-General, federal government ministers and parliamentarians, as well as visits by state and territory representatives.

The department surveyed portfolio ministers’ offices in April to measure levels of satisfaction with our support.

They agreed or strongly agreed our cables, daily briefs, alerts and media summaries were valuable. The offices strongly agreed the department provided a high level of support, especially for portfolio ministers’ visits overseas and for their involvement in cabinet and parliament.

Ministers’ offices provided variable feedback on the quality and timeliness of the department’s briefings and submissions. To address this feedback we initiated several new internal campaigns during the year including to lift writing standards and improve records of conversation.

A survey of key external stakeholders rated our performance highly. Stakeholders, including other government agencies and industry groups, were surveyed for the annual divisional business reviews.

High quality of DFAT briefi ng and other products

Cabinet submissions

9

Questions on notice

366

Meeting briefs

313

Ministerial correspondence

8,928

Ministerial submissions

1,731

Figure 6 DFAT support for ministers, briefi ng and other products

Ministerial travel

39

countries

52

visits to

38

DFAT Annual Report 2018-19

Minister for Trade, Tourism and Investment Senator Simon Birmingham and Indonesian Minister for Trade Enggartiasto Lukita ahead of the signing of the Indonesia-Australia Comprehensive Economic Partnership Agreement [DFAT/Tim Tobing]

Report on performance

39

Pursue our economic, trade and investment agenda for opportunity

Pursue our economic, trade and investment agenda for opportunity

Australia is one of the most open and successful economies in the world. Our openness to trade and investment and the competitiveness of our businesses overseas have made a major contribution to Australia’s 28 years of uninterrupted annual economic growth.

We are increasingly connected to global markets. In 2018 Australia’s total trade in goods and services increased by 11.6 per cent to $853 billion. The level of foreign investment in Australia increased 5.6 per cent to $3.5 trillion and the level of outward investment from Australia increased 7.6 per cent to $2.5 trillion.

This is good for our economy—one in every seven Australian jobs is with one of the more than 53,000 businesses that export goods and services. Compared with non-exporters, these businesses employ more staff, are more productive and pay more in average wages.

One in 10 Australian jobs is supported by foreign direct investment. This provides Australia with the capital needed to finance new productive capacity and to boost infrastructure.

Openness to global markets means household goods are cheaper and Australian consumers have greater choice. Over the past decade, the price of goods and services exposed to international trade rose by only 6.8 per cent, compared to a 23.6 per cent increase in prices overall.

In 2018-19 Australia’s trade agenda was as ambitious as it has ever been, but our operating context grew increasingly difficult. Escalating trade tensions between the United States and China increased uncertainty and the risk of unintended consequences for third parties. There is growing pressure on the global trading system to modernise and respond to the rise of large emerging economies, changing patterns of trade and new technologies.

In this dynamic global environment, the department’s efforts to advance Australia’s prosperity are more important—and more challenging—than ever.

Figure 7 Benefi ts of trade and investment for Australians

More than 53,000 Australian businesses export

Exports contributed $438 billion in income in 2018

1 in 5 jobs rely on trade

1 in 7 jobs rely on exports

Trade liberalisation delivered about $8,448 in extra real income to the average family

1 in 10 jobs is supported by foreign direct investment

Trade liberalisation has reduced the cost of household items by up to 13 per cent in the

past 10 years

Trade has contributed almost 30 per cent of Australia’s economic growth over the

past six years

$438b

13%

AUD

40

DFAT Annual Report 2018-19

Promoting open markets and global trading rules The department’s efforts to increase Australia’s prosperity, create new opportunities for our businesses and deliver benefits to Australian consumers are underpinned by international rules, particularly those of the World Trade Organization (WTO).

However the WTO faces a number of serious challenges. The past year saw growing anti-trade sentiment in some countries, more unilateral trade measures and intensified trade tensions—which risk damaging the multilateral trading system. Despite increased engagement on WTO

reform and progress on negotiations on e-commerce and other issues, agreement on significant outcomes remained out of reach. The WTO dispute settlement system— vital to enforcing our trade law rights and protecting Australian businesses—faces significant challenges and needs reform.

International economic forums such as the Asia-Pacific Economic Cooperation (APEC), the Group of Twenty (G20) and the Organisation for Economic Co-operation and Development (OECD) support an open global economy. Australia continued to use those forums to pursue our interests.

Performance measure How we rate our performance*

Effectiveness in supporting the global rules-based trading system and opening markets. Influential advocacy in favour of open markets, resisting protectionism and the rules-based trading system internationally and domestically.

On track but progress towards promoting open markets and global trading rules is under strain

Source: Corporate Plan 2018-19 p. 12, PBS 2018-19 program 1.1 p. 29 | Funding: PBS 2018-19 program 1.1

* Our assessment is informed by WTO, APEC, G20 and OECD outcomes, diplomatic reporting on feedback from foreign governments and new trade agreements.

Our performance

We assess that we are ‘on track’ against this performance measure. Despite significant challenges to the open global trading system in 2018-19, Australia continued to be a key supporter of the WTO and an influential advocate for reform and open markets. We played a major role in leading the negotiations among WTO members on e-commerce and behind the border barriers to trade in services. We arranged for Australia to join the WTO Government Procurement Agreement and we completed negotiations on a number of free trade agreements (FTAs) that will open markets.

We continued to be a leading voice in the WTO on agricultural trade reform, both through our leadership of the Cairns Group (a coalition of 19 agricultural exporting countries) and our active defence of Australia’s agricultural interests. We raised concerns in the WTO about the agricultural policies of China, the European Union, India, the United States and other countries, with

a focus on India’s subsidies for sugar and trade-restricting measures on pulses.

Australia’s participation in the WTO dispute settlement system advanced Australian interests and reinforced the system during a period of crisis. In 2018-19 we strongly defended ongoing disputes brought against Australia on tobacco plain packaging and on anti-dumping measures on A4 copy paper. We initiated two cases to enhance opportunities for Australian exporters of wine and sugar.

The department contributed to efforts to reform the WTO dispute settlement system, tabling proposals to resolve the impasse on appointments of new Appellate Body members. Without new members, the Appellate Body will not be able to hear appeals after December 2019. Despite our best efforts, WTO members failed to reach agreement in 2018-19, and work continues. Failure to resolve the issue will make it more difficult to enforce global trade law to the detriment of the multilateral rules-based trading system.

41

Pursue our economic, trade and investment agenda for opportunity

Report on performance

Over 2018-19 we helped bolster support for the global rules-based trading system in APEC, the G20 and the OECD, including at eight ministerial or leader-level meetings. Progress was difficult, as protectionist pressures and tensions among major economies continued to rise. In November APEC leaders were unable to agree to a leaders’ declaration, however agreement was reached in other forums, including by G20 leaders in June.

The department provided strong policy support for Papua New Guinea’s successful hosting of APEC in 2018. We worked closely with Papua New Guinea’s APEC team throughout the year to support its agenda. This included providing a digital economy expert to help Papua New Guinea develop its key theme as host: harnessing inclusive opportunities, embracing the digital future. We helped Papua New Guinea secure agreement from APEC economies to focus more strategically on building the region’s digital infrastructure and to develop better

rules governing digital trade. This will help Australian companies doing business online with these fast-growing economies. We also launched an APEC fund on digital innovation with the Republic of Korea to help APEC economies implement policies that expand e-commerce and digital trade in the Asia-Pacific.

We delivered a series of APEC workshops on services and investment to accelerate recognition of professional qualifications. Improving recognition of qualifications will make it easier for Australians to work across the region and help encourage APEC economies to liberalise investment policy settings.

We participated in multilateral reform efforts to strengthen transparency and improve safeguards in investor-state dispute settlement (ISDS) arrangements. We also pursued ISDS reform, signing an updated investment treaty with Uruguay in April, which contains modern safeguards and reaffirms governments’ right to regulate.

Supporting Australian businesses to secure opportunities globally Australia is at the forefront of negotiating comprehensive FTAs and new WTO rules. These provide our firms with new market openings, reduce the cost of doing business overseas, and deliver greater choice and more affordable products to Australians.

The 2017 Foreign Policy White Paper set an ambitious target to expand Australia’s network of FTAs to account for 80 per cent of our two-way trade by 2020. Completing FTA negotiations with the European Union and Regional Comprehensive Economic

Partnership countries will see over 86 per cent of two-way trade covered by our FTAs. The government’s goal now is for FTAs to cover around 90 per cent of Australia’s two-way trade by 2022.

Trade agreements that link multiple economies help Australian businesses reduce transaction costs and better access global supply chains. We are working to increase the degree to which the major Indo-Pacific economies work together under common trade and investment rules.

Performance measures How we rate our performance*

Concluded free trade agreements with countries that account for over 80 per cent of Australia’s trade by 2020. On track

Increased opportunities for Australian businesses.

On track

Source: Corporate Plan 2018-19 p. 12 PBS program 1.1, p. 29 | Funding: PBS 2018-19 program 1.1

* Our assessment is informed by economic data, new market access for Australian firms, outcomes of FTA reviews with partner countries and progress in negotiations.

42

DFAT Annual Report 2018-19

Our performance

It is challenging to negotiate, conclude and implement comprehensive trade agreements with multiple countries that have varying trade and economic interests and different priorities for economic development. We would have liked to conclude some agreements more quickly than we did. On balance, we rate our performance against these measures as ‘on track’ given the progress we made and the opportunities created for Australian businesses, despite the challenges.

On 31 October Australia ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which entered into force on 30 December. The agreement has already delivered two sets of tariff cuts for Australian goods exporters. This includes reductions on Japan’s import tariffs on beef and numerous dairy products, and preferential access into Canada and Mexico.

Australia and Indonesia signed the Indonesia-Australia Comprehensive Economic Partnership (IA-CEPA) on 4 March 2019, launching a new chapter in our economic relations. Once ratified, this agreement will provide significant new market access and greater certainty for Australian exporters and investors in one of the fastest growing economies in the Indo-Pacific.

‘IA-CEPA will cement the existing relationship between Australian and Indonesian milling wheat industries, whilst allowing new trade, investment and relationships to flourish between Australia’s grain industry and Indonesia’s food manufacturing, stockfeed and livestock sectors.’

Brett Hosking, Chairman of GrainGrowers

On 26 March Australia and Hong Kong signed the Australia-Hong Kong FTA and associated investment agreement. These agreements will guarantee duty-free access for Australian goods into Hong Kong, open services and investment settings, and help attract vital capital into new and existing industries in Australia.

The Peru-Australia FTA, signed in 2018, will give Australian industry immediate duty-free access to the Peru market for a range of goods, helping to diversify markets for Australian exporters.

We are working to ratify the FTAs with Indonesia, Hong Kong and Peru in the near future, and will bring these agreements into force.

We are negotiating a comprehensive and ambitious trade agreement with the European Union to give Australian exporters a competitive edge. An Australia-European Union FTA will open new opportunities for Australian companies in the very large European Union market, with its USD18.7 trillion GDP (2019) and population of 510 million (2018). It will also underline our shared commitment to supporting the global rules-based trading system.

We initiated a review to upgrade the ASEAN-Australia-New Zealand FTA, and deepened bilateral dialogue with Japan and the Republic of Korea on regional economic issues. We continued to pursue conclusion of Regional Comprehensive Economic Partnership (RCEP) —an FTA between the ten ASEAN member states, Australia, China, India, Japan, the Republic of Korea and New Zealand. Leaders of RCEP countries, including Prime Minister Morrison, have set 2019 as the deadline for concluding this agreement. We are negotiating with China on the RCEP and continuing to work towards the general review of the China- Australia FTA.

Chief Negotiatior Alison Burrows with the European Union Chief Negotiator Helena KÓ§nig [DFAT/Linda Roche]

43

Pursue our economic, trade and investment agenda for opportunity

Report on performance

We were unable to reach the anticipated conclusion of the Pacific Alliance FTA (Chile, Colombia, Mexico and Peru) in 2018 due to changes of government in some Pacific Alliance countries that year; negotiations are ongoing.

We secured Australia’s accession to the WTO Agreement on Government Procurement, giving our businesses better access and certainty in bidding for government contracts in 47 new markets, including the European Union. The agreement covers around $2.3 trillion of government procurement annually, which will grow as other countries join.

We led efforts to launch WTO e-commerce negotiations on new rules for trading goods and services online. These negotiations help address barriers to digital trade and provide appropriate consumer protection on issues such as privacy and security.

We secured the support of 60 WTO members (representing over 70 per cent of world trade) to negotiate new rules to eliminate behind the border barriers to trade in services. When concluded, these will give Australian service providers greater

regulatory certainty and transparency in overseas markets, including those delivering services online.

We led work on legislative changes to provide Export Finance Australia (formerly Efic) with an additional $1 billion in capital and an expanded mandate to finance overseas infrastructure development. Export Finance Australia can now help more Australian businesses, including small and medium enterprises, to take advantage of commercial opportunities from Indo-Pacific infrastructure projects, and help drive stronger commercial links between Australia and our region.

We also helped Australia’s defence industry secure export opportunities through the first two transactions under the Defence Export Facility. A $90 million loan to Canberra-based CEA Technologies will finance a new manufacturing facility to help grow the company’s exports. A loan of US$80 million to the Government of Trinidad and Tobago will support its purchase of two Austal Cape Class Patrol Boats—the first overseas sale of this class of vessel by Austal.

67.8% In force

Percentage of Australia's total trade covered by an FTA, 30 June 2019

2.3% Concluded but not yet in force

16.5% Under negotiation. Source: ABS

Figure 8 Percentage of Australia's total trade with countries with which Australia has an FTA, 2018

67.8% In force

2.3% Concluded but not yet in force

16.5% Under negotiation Source: ABS

Figure 8 Percentage of Australia’s total two-way trade with FTA partners 2018

New Zealand

Singapore

United States

Thailand

Chile

Malaysia Brunei

Cambodia

Indonesia

Laos

Myanmar

Philippines

Vietnam

Republic of Korea Japan China

Canada

Mexico

Cook Islands

Kiribati Nauru

Niue Samoa

Solomon Islands

Tonga

Tuvalu

Vanuatu Peru

Hong Kong India

European Union

Colombia

44

DFAT Annual Report 2018-19

Ensuring domestic policies support trade and investment Australia’s international competitiveness and economic resilience depend on our domestic policy settings, with significant implications for Australian firms doing business overseas and for our attractiveness as an investment destination. Decisions made as a result of our increasingly challenging national security environment can also have implications for our economic competitiveness. We worked to ensure that all relevant factors were considered by the government.

Public surveys, including the Lowy Institute’s 2019 poll—as well as the department’s own consultations—found most Australians support free trade, but also showed some increased community anxiety about globalisation. These concerns are closely linked to changing patterns of production, technology and its impact on wages growth and employment, and immigration and tax

issues. In 2018-19 we worked to explain how openness to trade and investment improves the welfare of Australia’s economy and local communities.

‘Three-quarters of Australians (75%) say free trade is ‘good for [their] own standard of living’, up eight points since 2017, and 71% agree free trade is good for the Australian economy. A majority say free trade is good for Australian companies (65%) and creating jobs in Australia (61%, up six points from 2017). While 72% of Australians say globalisation is ‘mostly good’ for Australia, this has fallen six points from 2017 in a return to 2008 levels.’

The Lowy Institute Poll 2019

Performance measure How we rate our performance*

Extent to which international competitiveness on trade and investment is factored into Australian economic policy settings.

On track

Source: Corporate Plan 2018-19 p. 13 | Funding: PBS 2018-19 program 1.1

* Our assessment is informed by economic data, statistical analysis, diplomatic reporting on feedback from business, public polls and consultations, and contributions to whole-of-government policy.

Our performance

Over 2018-19 the department contributed to whole-of-government consultations and decisions relating to Australia’s competitiveness. This included policies on foreign investment, visas and migration, and energy and resources. We engaged in domestic policy formulation processes to ensure issues affecting our economy were considered and to explain the benefits to Australia of open economic settings. We assess that we are ‘on track’ against this performance measure based on the outcomes detailed below.

We helped enable strong inward foreign investment flows by contributing to 664 Foreign Investment Review Board

application assessments. This was a 45 per cent increase in applications compared to 2017-18 and represented hundreds of millions of dollars in potential investment to support more jobs for Australians, including in agriculture, mining and critical infrastructure.

We also worked with Austrade to lift Australia’s profile as a destination for foreign investment, including through an annual investment statement to the parliament by the Trade Minister. Overseas investors continued to see Australia as an attractive destination, despite intense global competition for investment.

45

Pursue our economic, trade and investment agenda for opportunity

Report on performance

IRON ORES & CONCENTRATES

COAL (a)

EDUCATION-RELATED TRAVEL SERVICES (b)

NATURAL GAS

PERSONAL TRAVEL (EXCL EDUCATION) SERVICES

AUSTRALIA'S TOP 5 EXPORTS, GOODS & SERVICES

Figure 9 Australia’s trade with the world 2018

AUSTRALIA'S GOODS & SERVICES EXPORTS

$22.3 BILLION INDIA

$26.6 BILLION REPUBLIC OF KOREA

$23.1 BILLION UNITED STATES

$136.3 BILLION CHINA  17.5%

 24.5%

 13.9%

 10.1%

 10.1%

$58.8 BILLION JAPAN

$66.9 BILLION  17%

$63.3 BILLION  0.3%

$43.3 BILLION  69%

$35.2 BILLION  16.4%

$22.3 BILLION  4.5%

(a) Includes balance of payments adjustments for 2018 (b) Includes student expenditure on tuition fees and living expenses

Source: ABS

TOTAL VALUE OF EXPORTS $438.1 BILLION  13.2%

DFAT Annual Report 2018-19

46

IRON ORES & CONCENTRATES

COAL (a)

EDUCATION-RELATED TRAVEL SERVICES (b)

NATURAL GAS

PERSONAL TRAVEL (EXCL EDUCATION) SERVICES

AUSTRALIA'S TOP 5 EXPORTS, GOODS & SERVICES

Figure 9 Australia’s trade with the world 2018

AUSTRALIA'S GOODS & SERVICES EXPORTS

$22.3 BILLION INDIA

$26.6 BILLION REPUBLIC OF KOREA

$23.1 BILLION UNITED STATES

$136.3 BILLION CHINA  17.5%

 24.5%

 13.9%

 10.1%

 10.1%

$58.8 BILLION JAPAN

$66.9 BILLION  17%

$63.3 BILLION  0.3%

$43.3 BILLION  69%

$35.2 BILLION  16.4%

$22.3 BILLION  4.5%

(a) Includes balance of payments adjustments for 2018 (b) Includes student expenditure on tuition fees and living expenses

Source: ABS

TOTAL VALUE OF EXPORTS $438.1 BILLION  13.2%

REFINED PETROLEUM

TELECOM EQUIPMENT & PARTS

CRUDE PETROLEUM

PERSONAL TRAVEL (EXCL EDUCATION) SERVICES

AUSTRALIA'S TOP 5 IMPORTS, GOODS & SERVICES

PASSENGER MOTOR VEHICLES

AUSTRALIA'S GOODS & SERVICES IMPORTS

 16.1%

 7.3%

 8.7%

 10.4%

 4.0% $17.9 BILLION THAILAND

$27 BILLION JAPAN

$18.8 BILLION GERMANY

$78.3 BILLION CHINA

$50.8 BILLION UNITED STATES

$44.8 BILLION  11.3%

$25.3 BILLION  31.9%

$22.4 BILLION  1.8%

$14.4 BILLION  12.6%

$13.8 BILLION  45.3%

TOTAL VALUE OF IMPORTS $415 BILLION  9.9%

Pursue our economic, trade and investment agenda for opportunity

Report on performance

47

Supporting business to unlock new opportunities The department is helping Australian businesses navigate a contested world while keeping in touch with their views and experiences. We held three strategic dialogues during the year with leaders in business and education on foreign policy and security issues. The dialogues enabled frank exchanges between leaders and our Secretary. Business leaders shared their ideas about trade and investment, new

and emerging technologies and threats to business, all of which affect strategic commercial decision-making. Discussions ranged across critical infrastructure, defence industry, emerging technology and natural resources. Ninety per cent of the participants who provided feedback felt the dialogues had informed their thinking on foreign policy and security issues.

Our analysis helped inform the government’s understanding of international economic developments and contributed to domestic policy settings designed to enhance Australia’s competitiveness. For example, we helped build understanding of the factors that make Australia an attractive destination for skilled migrants, including by contributing to the population and migration policy reforms announced by the Prime Minister in March.

We helped build understanding of the benefits of trade and investment, and the value of an open economy for Australia, including through our new cross-agency dialogue on Talking to the Australian Public about Globalisation. We refreshed our physical and online advocacy products to ensure we were communicating effectively with Australian businesses and consumers.

Young Australians learn about trade Young Australians are learning more about the benefits of free trade through the department’s outreach activities. In March Year 10 students from South Australia and Queensland took part in an Australia-ASEAN Youth Forum. Through role-play, participants learned more about ASEAN member countries and Australia’s relationship with the region. They shared what they had learnt about trade issues with the Trade Minister. A new interactive website—Australia’s Trade through Time—was launched at the forum, allowing users to trace the history of our trade and its contribution to making Australia one of the world’s most open and successful economies.

Minister for Trade, Tourism and Investment Senator Simon Birmingham with students at the Australia- ASEAN Youth Forum in South Australia [Asia Education Foundation/Andrew Beveridge]

Over 2018-19 we responded to more than 2,400 requests for trade and investment data from the public, ministers and government departments. Government, business and community organisations use our data to make informed, evidence-based decisions.

Together with Austrade, the department improved the Australian community’s

understanding of the important role of foreign investment. We released the Economic Activity of Foreign-owened Businesses in Australia report in August, helping inform public debate on foreign investment in Australia and explaining its economic effects. We also worked with the Australian Bureau of Statistics to publish more than 60 fact sheets about investment flows.

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DFAT Annual Report 2018-19

Supporting Australian trade and investment outcomes We are working hard to strengthen the department’s economic and commercial diplomacy in response to feedback from Australian companies about how we can better help them find global opportunities.

The 2018-19 Budget provided $15 million over four years to increase support for Australian business. This includes

whole-of-government efforts to address non-tariff barriers more effectively and a partnership with business to strengthen the competitiveness of our services sector. It also involves using our posts more effectively to support business, and greater efforts to help businesses understand how to use our free trade agreements.

Performance measure How we rate our performance*

Positive trade and investment outcomes supported by the department’s economic and commercial diplomacy, and domestic advocacy efforts.

On track

Source: Corporate Plan 2018-19 p. 13 | Funding: PBS 2018-19 program 1.1

* Our assessment is informed by surveys, statistical analysis, progress in negotiations, diplomatic reporting on feedback from business and customs data.

Our performance

A key priority for our diplomatic missions around the world is helping Australian businesses achieve commercial outcomes. With Austrade, the department helped Australian companies address challenges overseas, briefed them on local business conditions to pre-empt issues and inform decision-making, and helped them find commercial opportunities and make new partnerships. We also engaged with partner countries to address systemic issues impacting Australian businesses, improve trade and investment outcomes, and remove regulatory burdens for Australian businesses overseas. In doing so, we highlighted the benefits of open markets to other governments and the value Australian businesses add to their economies. We assess that we are ‘on track’ against this performance measure.

Australia’s Non-Tariff Barrier Action Plan, launched in December, is a whole-of-government strategy to reduce or remove unjustified trade restrictions hampering Australian exports. We developed systems to enhance whole-of-government efforts to respond to non-tariff barriers— including a dedicated non-tariff barrier gateway (tradebarriers.dfat.gov.au)—and established a multi-agency trade barrier coordination team. Since its launch, we have identified more than 200 potential non-tariff barriers and, working with partner agencies, have made progress toward addressing a number of them.

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Pursue our economic, trade and investment agenda for opportunity

Report on performance

Million-dollar opportunity for Tasmanian seafood exporter A Tasmanian seafood producer is preparing to sell up to $4 million of seafood to China each season, after the department’s efforts increased access to the Chinese market. The first query lodged through the Trade Barriers Gateway was from Huon Valley Seafood—a Tasmania-based seafood processing and packing business that employs 16 staff. Despite expanding export market access opportunities provided by the China-Australia Free Trade Agreement, one of Huon Valley Seafood’s products—Gould Squid—was not on China’s list of approved exports from Australia. In January—following long-term efforts by the department and other agencies—new seafood species, including Gould Squid, were granted market access.

‘We are anticipating sales between three and four million dollars next season, which will substantially increase our turnover and direct employment. The flow-on effect to the fishing industry and transport sector is also very positive. All these factors are important to the continued viability of our company and the industry.’

Ambrose Coad, Managing Director, Huon Valley Seafood

‘Improved market access for Australian seafood products into a diversity of markets is a great win, as suppliers will be able to grow their business to fill increased international orders. ’

Jane Lovell, Chief Executive Officer, Seafood Industry Australia

Assistant Trade and Investment Minister Mark Coulton in Tokyo checking out AEON’s campaign promoting Australian beef following entry into force of the CPTPP [Australian Embassy Tokyo] Assistant Trade and Investment Minister Mark Coulton in Tokyo checking out AEON’s campaign promoting Australian beef following entry into force of the CPTPP [Australian Embassy Tokyo]

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DFAT Annual Report 2018-19

In 2018-19 we helped Australian professional bodies establish 13 new mutual recognition agreements. These set the framework for two-way recognition of qualifications and registration, including with Canada, France, Hong Kong, Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka and the United States. The agreements open new commercial opportunities for Australian accountants, engineers and quantity surveyors by allowing them to practice overseas without having to meet additional local registration or qualification requirements.

We initiated a partnership between Australia’s services sector and government to develop an industry-led Services Export Action Plan. We are working with business leaders to identify and address

barriers faced by Australians offering services overseas. This will boost the competitiveness of Australia’s services providers and grow our services exports.

We worked closely with the Australian beef industry to secure continued access for Australian beef exports into the European Union. A deal struck between the United States and the European Union jeopardised Australia’s access to the valuable grain-fed high-quality beef quota. Although access will be reduced, our efforts—underpinned by WTO rules—secured a number of concessions, including an extended seven-year transition period for changes to the quota. We are working to improve access for our beef producers through the Australia-European Union FTA negotiations.

Our strong partnership with business in Europe The department is fostering greater trade and investment links with Europe. During the 2019 European Australian Business Council mission to the region, we worked with Austrade to connect council members with trade and investment and public-private sector collaboration opportunities in France, Germany, Belgium, Denmark, Sweden and the United Kingdom.

We held the inaugural Australia-Germany Joint Economic Committee Meeting in Berlin. Participation from Australian and German ministers, senior officials and business leaders from Europe and Australia underscored the strong partnership and identified opportunities to enhance economic cooperation. This will build on the more than 700 German companies in Australia employing around 98,000 people in a range of sectors including advanced manufacturing, chemicals, financial services, infrastructure, and information and communication technologies. In 2018 Germany’s total foreign investment stock in Australia was valued at $49 billion, of which $24.3 billion was foreign direct investment—the 10th largest source of foreign direct investment in Australia.

Ambassador to Italy Greg French with Paolo Zegna at Archill Farm in Armidale, NSW. Australian sheep from this farm provide first-class wool to make Italy’s famous Zegna suits. There is a longstanding connection between Australia and the Ermenegildo Zegna Group which, since its foundation in 1910, has made all of its fabrics from Australian wool [Australian Embassy Rome]

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Pursue our economic, trade and investment agenda for opportunity

Report on performance

We helped Australian business understand the potential economic implications of United States-China trade tensions for the Australian economy. We communicated this and other insights to inform business decision-making through briefings to Australian companies, and the Strategic Dialogue with Business on Foreign Policy and Security Issues.

We provided Australian businesses overseas with information on economic trends and commercial opportunities in foreign markets. In 2018-19 we released 50 new Market Insights reports to provide business with commercial intelligence— including political and economic analysis, and information about the business environment in key markets—to help them make informed decisions about their international operations. This information has been viewed online more than 4,000 times since November 2018.

To boost awareness and use of Australia’s FTAs, the department and Austrade delivered 23 information seminars during the year. Seventeen of these were

in regional areas enabling us to reach small to medium-sized enterprises, and help them take advantage of our FTAs. Feedback from participants indicated a greater understanding about Australia’s trade agenda and the benefits that may be derived from the agreements.

We expanded the FTA portal (ftaportal.dfat. gov.au) which provides valuable information for Australian exporters. It now includes commitments made under the CPTPP, as well as on services in all our in-force FTAs. In 2018-19 the portal attracted an average of 2,600 users each week.

Our advocacy and support helped business take advantage of tariff preferences under our FTAs with China, Japan and the Republic of Korea. Use of our bilateral FTAs with these important North Asian markets has continued to be strong since entry into force. On average, the use of these agreements to gain preferential access for Australian exports to China, Japan and the Republic of Korea increased from 87 per cent in 2016 to 93 per cent in 2017.

Top 10 sources of foreign investment Foreign direct investment by sector

$365.5 billion Mining

$56.7 billion Wholesale and retail trade

$3.2 billion Agriculture

$107.7 billion Manufacturing

$939.5 billion United States

$574.8 billion United Kingdom

$316.9 billion Belgium

$229.3 billion Japan

$118.8 billion Hong Kong (SAR of China)

$85.4 billion Singapore

$81.5 billion Netherlands

$78.4 billion Luxembourg

$63.6 billion China

$50.2 billion France

Figure 10 Foreign investment in Australia in 2018 (levels)

Total value of foreign investment in Australia $3,514 billion, up 5.6 per cent

$102.9 billion Real estate

$107.5 billion Finance and insurance

One of four detectors that make up the Davis Infrasound Array— Australia’s final CTBT international monitoring station—located in the Australian Antarctic Territory [CTBTO]

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DFAT Annual Report 2018-19

One of four detectors that make up the Davis Infrasound Array— Australia’s final CTBT international monitoring station—located in the Australian Antarctic Territory [CTBTO]

Keep Australia and Australians safe and secure

Report on performance

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Keep Australia and Australians safe and secure

The world presents many threats to the safety of Australians, both at home and overseas. These threats are diverse and evolving, from nuclear weapons proliferation to terrorist insurgency, cyber attack and transnational crime. The government has taken firm steps across these areas to protect Australians at home.

Australia cannot address any of these threats alone. The department works internationally to keep Australians safe, reinforcing and multiplying the impact of the resolute action the government has taken at home.

Those who wish to harm us can be clever and innovative. Effective defence is impossible without international

cooperation to keep one step ahead of malign actors and to deal with hostile new actors. The department ensures Australia is at the forefront of international engagement, advocacy and action to fight terrorism and violent extremism; reduce people smuggling, human trafficking and modern slavery; promote an open, free and secure cyberspace; and to counter the proliferation of nuclear and chemical weapons.

The department’s ambassadors for counter-terrorism, cyber affairs, and people smuggling and human trafficking enhance Australia’s leadership role internationally in these key areas. Our success hinges on seamless, whole-of-government collaboration and coordination.

Countering terrorism and violent extremism Terrorist activity poses one of the most significant threats to Australians living and travelling overseas. Numerous terrorist groups and lone actors have demonstrated the capability and intent to undertake attacks anywhere in the world, as recent attacks in Sri Lanka and New Zealand have shown.

Australia’s contribution to international efforts in Afghanistan and Iraq aims to destroy and degrade major terrorist capabilities. The territorial defeat of Da’esh

(ISIL) in March 2019 was an important milestone in the international fight against terrorism, but the threat continues. Foreigners—including some Australians— who went to Syria and Iraq to fight for ISIL present a considerable ongoing threat. ISIL’s influence has already inspired terrorist attacks in Southeast Asia. A proliferation of ISIL inspired terrorism in our neighbourhood contributes to a less secure regional environment with direct implications for Australia.

Performance measure How we rate our performance*

Effective counter-terrorism outcomes delivered through international and domestic engagement that promote Australia’s security interests. On track

Source: Corporate Plan 2018-19 p. 14 | Funding: PBS 2018-19 programs 1.1, 1.2, 1.3 and 1.4

* Our assessment is informed by diplomatic reporting, results from development programs including Australia Awards, commitments made at international meetings and our sanctions database.

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DFAT Annual Report 2018-19

Our performance

The Ambassador for Counter-Terrorism led consultations with countries in our region to develop joint understanding of emerging transnational threats, implement measures to address them and build resilience.

This collaboration ensures that regional countries remain focused on the terrorist threat and have in place effective practices to deter, detect and prosecute terrorists. It enables Australia to track terrorist activity on our doorstep and boosts our capacity to counter threats before they reach our shores. As a result, we rate our performance against this measure as ‘on track’.

Cooperation and information sharing with other countries maximises our collective ability to foil terrorist plots, and to capture and prosecute terrorists. At the centre of the Australian Government’s concerns—and those of the department—is the surviving cohort of foreign terrorist fighters, some of whom may travel back from the Middle East to our region, bringing radicalised ideology and battlefield experience. During the year we worked with other government agencies to help innocent victims of foreign terrorist fighters by repatriating unaccompanied Australian children who were detained in camps in Syria.

Tackling terrorism with Indonesia Since the 2002 Bali bombings, Indonesia has become one of Australia’s closest partners for cooperation on counter-terrorism and countering violent extremism. Cooperation spans our respective law enforcement, security and policy agencies.

We paved the way for even greater practical cooperation between Australia and Indonesia in December by renewing a memorandum of understanding on countering terrorism and violent extremism at the fifth annual counter-terrorism consultations with Indonesia. The department led Australia’s delegation.

In November countries in our region agreed to strengthen legal responses to returning foreign terrorist fighters. Australia and Indonesia co-hosted the sub-regional meeting on counter-terrorism where

countries agreed to a series of practical measures to advance regional cooperation, including capacity building.

Under our joint leadership, the Global Counter-Terrorism Forum’s working group on countering violent extremism delivered better practice guides on topics including:

§ managing returning foreign terrorist fighters and their families

§ gender and the role of civil society organisations

§ countering violent extremism in prisons.

Our development program with Indonesia this year included projects to promote tolerance, combat hate speech and empower women’s voices to prevent violent extremism.

Terrorism knows no borders, and beyond our immediate region we worked closely with a range of countries to improve security and counter terrorism. Some highlights of our work are outlined below. In Afghanistan we:

• enhanced security infrastructure in Kabul

• provided Afghan security forces with technology to counter improvised explosive devices

• provided diplomatic support to the NATO mission, which is working to strengthen the capacity of Afghan security forces to combat terrorist groups.

The Easter Sunday terrorist attacks on churches and hotels in Sri Lanka on 21 April 2019 killed 258 people, including two Australians. As well as providing consular support to Australians, we coordinated assistance from the Australian Federal Police, which helped the Sri Lankan authorities investigate the attacks and achieve justice for the victims. As the country grapples with the aftermath of the attacks, including the economic impact, we will continue to support the Sri Lankan Government efforts to counter terrorism and rebuild the devastated tourism industry.

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Keep Australia and Australians safe and secure

Report on performance

Our strong collaboration with India was boosted at the 11th Australia-India joint working group on counter-terrorism. The Ambassador for Counter-Terrorism led Australia’s delegation, and both sides agreed to capacity building and greater information sharing on:

• countering violent extremism

• warnings on terrorist threats

• mutual legal assistance.

Over 70 Bangladeshi government officials also completed courses funded through Australia Awards on countering terrorist

financing and extremist messaging on social media.

We deepened links with Australian companies operating overseas whose interests and personnel are vulnerable to terrorist activity. For example we hosted a West Africa mining security conference in Accra to help Australian mining companies better address security risks. More than 200 participants from 78 companies agreed they were better equipped to undertake critical security risk mitigation planning for regional operations and personnel.

High Commissioner to Ghana Andrew Barnes, First Assistant Secretary HK Yu, Third Secretary Claire Maizonnier and Executive Officer Dr Andrew Marriott (L to R), at the Obuasi gold mine in Ghana. Australian underground mining experts are working with mine operator Anglo Gold Ashanti to help Ghana further develop this 125 year old mine— training local labour and using local content [Australian High Commission Accra]

People who do not feel hopeful about the future can be vulnerable to radical ideologies and recruitment by terrorists. Through our development program we supported a range of projects to build resilience and counter violent extremism. For example, we encouraged the Global Community Engagement and Resilience Fund to expand to Southeast Asia. It will now deliver a new program in the

Philippines to address radicalisation in Mindanao and other vulnerable parts of the country.

The department implemented targeted financial sanctions to prevent terrorists and terrorist organisations from raising, moving and using funds, including UN counter-terrorism sanctions against eight individuals and three entities.

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G20 response to Christchurch terror attack Prime Minister Morrison persuaded leaders of the world’s major economies to take action against extremist content online after the live-streamed terrorist attack on a mosque in Christchurch, New Zealand in March.

In June Australia advanced and secured the G20 leaders’ statement—urging online platforms to step up the ambition and pace of their efforts to prevent terrorist

and violent extremist content from being streamed, uploaded or reloaded.

We worked with the Department of the Prime Minister and Cabinet to consult member states, and supported the Trade Minister at the G20 Ministerial Meeting on Trade and the Digital Economy.

Australia continues to engage with member states through a variety of forums to ensure the G20 leaders’ statement progresses collective action.

Advocating for an open, free and secure cyberspace Australians depend on the internet for many aspects of everyday life, including access to government services, banking, education, commerce and entertainment. Cyberspace is an engine of economic growth and innovation. But it is also a contested domain that some countries seek to use for foreign interference, data theft and criminal activity, repression and control.

Australians’ ability to reap the benefits of global connectivity depends on cyberspace remaining open, free and secure. Our international advocacy is important to ensure that Australians do not lose these

benefits and to enhance cyber security, including by improving the cyber security of our neighbouring countries.

Cyberspace can be misused in ways that undermine Australia’s interests. Some actors conduct malicious attacks which can bring down critical systems with potentially disastrous consequences. International collaboration is necessary to reinforce the application of existing laws and agreed norms of behaviour in cyberspace, and to strengthen our collective capacity to deter and respond to these incidents.

Performance measure How we rate our performance*

Australia’s advocacy for an open, free and secure cyberspace helps shape a peaceful and stable online environment, and enhances the ability of regional partners to take advantage of online opportunities.

On track

Source: Corporate Plan 2018-19 p. 15 | Funding: PBS 2018-19 programs 1.1, 1.2 and 1.4

*Our assessment is informed by UN resolutions and tracking implementation of Australia’s International Cyber Engagement Strategy.

Our performance

The Ambassador for Cyber Affairs is at the forefront of Australia’s international advocacy on cyberspace, and has driven implementation of Australia’s International Cyber Engagement Strategy. In March the

Minister for Foreign Affairs published a report (dfat.gov.au/cyber-affairs/2019_ progress_report) marking the significant progress made to implement the strategy’s comprehensive and ambitious agenda.

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Report on performance

Australia-Papua New Guinea cyber security partnership When Papua New Guinea hosted APEC Leaders Week in November, it was able to successfully provide a network for world leaders and their delegations that was safe from malicious cyber activity.

The department helped establish the Papua New Guinea National Cyber Security Centre as part of our largest bilateral cyber

security support project, which is backed by a $14.4 million commitment.

We are supporting Papua New Guinea to build on these achievements and for this increased capability to be sustainable— with ongoing training—to ensure the government can protect its sovereignty from cyber threats.

The department’s international advocacy has positioned Australia as a leading voice in multilateral forums advocating for existing international law and agreed norms of responsible state behaviour to be applied in cyberspace. We achieved affirmation by leaders, including at the East Asia Summit, that cyberspace is not ungoverned and that the same rules and principles that apply offline, apply online.

Australia’s significant expertise in cyber matters was recognised by our membership of the United Nations Group of Governmental Experts on Developments in the Field of Information and Telecommunications in the Context

of International Security—one of only 25 countries to do so. This will give Australia a greater voice as international deliberations on cyber issues evolve.

Australia demonstrated strong resolve in calling out malicious, state-sponsored cyber activity, particularly where it threatens to undermine global economic growth, national security and international stability. We publicly attributed malicious cyber behaviour to Russia, North Korea, Iran and China. Our close collaboration with other countries on public attributions set clear expectations for state behaviour in cyberspace.

Working to stop child sexual abuse online Australia was at the forefront of international efforts this year to prevent sexual abuse and exploitation of children online by securing the passage of a new resolution at the United Nations in Vienna.

In May at the Commission on Crime Prevention and Criminal Justice, we were successful in having a resolution passed urging states to take stronger action to address child sexual exploitation and abuse online, including by:

§ strengthening domestic legislation

§ resourcing law enforcement

§ increasing awareness and education

§ disrupting distribution of online material.

We worked with the Department of Home Affairs to design, introduce and lead negotiations on the Resolution on Countering Child Sexual Exploitation and Sexual Abuse Online, which was co-sponsored by 17 member states.

We stepped up our cyber cooperation program in the Indo-Pacific, increasing our investment from $4 million to $34 million out to 2023. We want to ensure the benefits of connectivity are realised across our region—including in the Pacific—and that all nations have an understanding of the risks. To this end, we have funded over 40 activities in ASEAN and Pacific countries to build their resilience against malicious

states and cybercriminals, and to enhance their digital capabilities. Early outcomes include new cybercrime legislation in Vanuatu and more than 200 police officers across the Pacific trained to deliver training on cybercrime. We rate our efforts to enhance the ability of regional partners to take advantage of online opportunities as ‘on track’.

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DFAT Annual Report 2018-19

Tackling irregular migration and human trafficking People smuggling and human trafficking remain significant problems in many parts of the world, often driven by criminal organisations that operate across borders. Australia is not immune. No country

can effectively tackle these issues in isolation, and we work closely with as many governments as possible, in a range of international groupings, as well as the private sector and civil society.

Performance measure How we rate our performance*

Increased participation by states and United Nations agencies in the Bali Process, Alliance 8.7 and other multilateral migration organisations and agreements in line with Australia’s interests.

On track

Source: Corporate Plan 2018-19 p. 14 | Funding: PBS 2018-19 programs 1.1, 1.2, 1.3 and 1.4

* Our assessment is informed by membership and outcomes of the Bali Process and Alliance 8.7, diplomatic reporting and feedback from the UN, civil society and business partners.

Our performance

Participation by other states and international organisations in international forums that tackle people smuggling and/ or modern slavery and human trafficking— the Bali Process we co-chair with Indonesia and Alliance 8.7 we chaired this year— has continued to increase. We rate our performance against this measure as ‘on track’.

The Ambassador for People Smuggling and Human Trafficking led Australia’s diplomatic work during the year on irregular migration, human trafficking and modern slavery. The department’s international engagement formed an essential part of the government’s efforts to maintain the integrity of Australia’s borders and

to address transnational criminal activity, which undermines our security and the security of our region.

The Foreign Minister and her Indonesian counterpart co-chaired the Seventh Bali Process Ministerial Conference in August. This attracted record participation by ministers (24), business leaders (49) and the heads of UNHCR (the UN Refugee Agency) and the International Organization for Migration (IOM). Ministers confirmed the government and business forum as an additional new track of the Bali Process. They welcomed the forum’s ‘acknowledge, act and advance’ recommendations to strengthen collaboration between governments and the private sector in tackling human trafficking and modern slavery.

The Bali Process Australia and Indonesia co-chaired the first regional ministerial conference in Bali in 2002 to address the growing scale and complexity of irregular migration in the Asia-Pacific.

The Bali Process—a forum to share information, exchange policy ideas and undertake practical cooperation to combat smuggling and trafficking—has since grown to encompass 45 government members as well as the IOM, UNHCR, the UN Office on Drugs and Crime and the International Labour Organization.

Its geographic span ranges from the Middle East across Asia and the Pacific

to North America. Seventeen states and 10 organisations are observers.

Australia’s participation in Bali Process working groups ensures members are better equipped to:

§ respond to irregular migration challenges

§ facilitate return and reintegration of persons not owed protection

§ improve supply chain transparency to help eradicate trafficking and slavery.

A number of smuggling and trafficking networks have been disrupted through this collaboration. In 2018, 10 Bali Process countries launched nine joint investigations.

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Keep Australia and Australians safe and secure

Report on performance

At the United Nations General Assembly (UNGA 73) in September, the Foreign Minister co-convened the Financial Sector Commission, which works to strengthen the global financial sector’s role in combating modern slavery and human trafficking.

At the same time the Foreign Minister— together with counterparts from Canada, New Zealand, the United Kingdom and the United States—issued a joint statement outlining principles to guide government action to combat trafficking in global supply chains.

The department organised the Asia-Pacific consultation of the Financial Sector Commission in Sydney in April, bringing modern slavery experts together to testify to the commissioners. Hosting the consultation ensured that Australia’s vanguard modern slavery legislation is at the heart of the global discussion.

The Ambassador for People Smuggling and Human Trafficking chaired the Alliance 8.7 initiative—a global grouping of governments, UN agencies, business and civil society. It has an active membership of more than 200, including 15 ‘pathfinder’ countries that are committed to going further or faster to achieve Sustainable Development Goal 8.7: to eradicate forced labour, end modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms of child

labour. During Australia’s period as chair, membership of the Alliance 8.7 Global Coordinating Group more than doubled.

We continued work with bilateral partner countries to deter people smugglers from undertaking illegal migration ventures to Australia. We also engaged a range of countries on refugee resettlement and regional processing. The department’s advocacy contributed to maintaining Australia’s strong border protection settings.

Australia has a strong interest in an effective, cohesive international response to mass movements of people. In December Australia supported the Global Compact on Refugees. Through effective advocacy and engagement with key partners, the department helped ensure:

• more predictable and equitable sharing of responsibility

• a focus on international obligations to protect and support refugees

• greater global responsibility for refugee crises.

We also engaged on the Global Compact for Safe, Orderly and Regular Migration, sharing best practice migration management policies. Australia did not support the final document because of concerns it would compromise our successful and well-managed national migration program.

Pursuing non-proliferation and disarmament The spread of weapons of mass destruction (WMD) and conventional weapons threatens international peace and stability, and undermines Australia’s security.

Longstanding, carefully negotiated arms control and counter-proliferation regimes have generally curbed the spread of nuclear and chemical weapons. But these

systems are under strain. The international community needs to work harder to strengthen adherence to these regimes and to ensure new realities and technologies are addressed. Australia is playing its part, but this is not something we can achieve alone. We are working with other countries in a difficult international climate of heightened strategic competition.

Performance measure How we rate our performance*

Successful promotion of Australia’s strategic interests related to weapons of mass destruction and conventional weapon risks, including through our multilateral engagement, implementing our related treaty obligations, and effectively chairing the Australia Group.

On track

Source: Corporate Plan 2018-19 p. 15, | Funding: PBS 2018-19 programs 1.1 and 1.4

* Our assessment is informed by statements in international organisations and forums, nuclear cooperation agreements with foreign governments, certification of international monitoring stations and diplomatic reporting.

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DFAT Annual Report 2018-19

Our performance

Throughout 2018-19 the department ensured Australia’s support for arms control, disarmament and non-proliferation was pursued in international forums. This includes through our leadership of key international bodies that are focused on these outcomes. Australia has been an unflagging contributor to collective actions which continue to act as a brake on the spread of nuclear weapons, and hold to account those responsible for chemical weapons attacks. We rate our performance against this measure as ‘on track’, notwithstanding heightened international tensions around the threat of WMD proliferation.

Our diplomatic efforts were integral to establishing the Organisation for the Prohibition of Chemical Weapon’s (OPCW) attribution mechanism for the use of chemical weapons in Syria, and more broadly. Now the OPCW can both investigate whether a chemical attack has taken place and determine who was responsible. In March Australia contributed EUR100,000 to help resource the OPCW’s

newly established investigation and identification team.

We also chaired the Australia Group, which coordinates national export control measures among 43 nations to contain the spread of WMD to countries of proliferation concern and non-state actors.

We coordinated the 12-country, cross-regional Non-Proliferation and Disarmament Initiative (NPDI) and led the dialogue with nuclear weapon states on key transparency and reporting initiatives. We also promoted the vital global interest in preserving the Nuclear Non-Proliferation Treaty (NPT) as the cornerstone of the non-proliferation and disarmament regime. Ongoing adherence to the treaty is critical to avoiding nuclear proliferation in the Indo-Pacific and beyond.

We maintained pressure on North Korea for complete and verifiable denuclearisation pending disarmament. We also urged Iran to maintain compliance with the Joint Comprehensive Plan of Action (JCPOA).

We continued support for the Comprehensive Nuclear-Test-Ban Treaty which, while unlikely to enter into force in the short term, has strong normative value against nuclear testing. The Foreign Minister chaired the Group of Friends of the Comprehensive Nuclear-Test-Ban Treaty meeting in September, which resulted in 78 states issuing a joint statement.

Australia’s Ambassador to the United Nations chaired the UN Disarmament

Commission and encouraged member states to reduce the risk of inadvertent nuclear weapons use.

We supported efforts to regulate the trade in conventional weapons by encouraging countries in the Indo-Pacific to sign on to the Arms Trade Treaty. We also co-hosted with New Zealand a conference in Brisbane. Palau has now ratified the treaty, joining the 103 other parties.

Space security and arms control Australia is working within the United Nations to help shape rules and norms in space.

Security, arms control and what to do about the millions of pieces of space debris are all growing challenges in space, requiring international solutions.

The department was an active participant during the year on UN bodies such as the Committee on the Peaceful Uses of Outer Space. We advocated for responsible

behaviour in space, including the proper disposal of satellites, to promote a safe, stable and sustainable space environment. The department supported voluntary long term sustainability guidelines, approved in April, to be endorsed by the UN General Assembly later in 2019.

We collaborated with the Australian Space Agency and the Department of Defence, contributing to international debates on security and arms control in space.

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Keep Australia and Australians safe and secure

Report on performance

The Australian Safeguards and Non-Proliferation Office (ASNO) has provided strong technical leadership, and its international reputation has added strategic weight to Australia’s non-proliferation policy.

ASNO helped the International Atomic Energy Agency (IAEA) deliver capacity building and training, including on nuclear safeguards in Timor-Leste. ASNO specialists chaired IAEA advisory groups and provided high-level access to enhance Australian and international security by improving nuclear safeguards and security architecture.

We signed a new Australia-United Kingdom nuclear cooperation agreement in August, which will enable exports of Australian uranium to continue to the United Kingdom if it formally withdraws from the European Union. Around a fifth (worth more than $120 million annually) of all Australian uranium exports are supplied to the United Kingdom for use or processing on behalf of third countries within Australia’s network of nuclear cooperation agreements.

The Australia-Ukraine nuclear cooperation agreement became operational in September, allowing Australian uranium to be used in Ukrainian nuclear power plants. Ukraine is among the world’s top

10 generators of nuclear power and has 15 nuclear power plants that supply over half of the country’s electricity. The nuclear cooperation agreement provides another avenue for Ukraine to diversify nuclear fuel services, currently largely dependent on Russia.

We undertook innovative policy development work to understand and promote Australia’s interests in emerging technologies and their enablers, especially those with security implications. We worked closely with other government agencies to frame policy deliberations on sensitive technologies and the critical minerals inputs to these technologies. Internationally we collaborated with partners on frameworks that could apply to the use of artificial intelligence in autonomous weapons systems and on rapidly evolving, and potential dual-use, space technology.

The department complies with controls and restrictions on sanctioned items and technology, and provides advice on sensitive export applications related to dual-use technology of nuclear, chemical weapons and biological weapons proliferation concern, controlled missile and other technology, and military use items.

Our role monitoring nuclear explosions In August, testing and certification was completed on Australia’s final international nuclear monitoring system—an infrasound monitoring station at Davis Station in the Australian Antarctic Territory.

Australia’s 21 facilities contribute to the Comprehensive Nuclear-Test-Ban Treaty Organization’s ability to provide prompt and scientifically sound data for verifying nuclear explosions. They serve as a

deterrent to nuclear weapons testing and nuclear weapons development.

Geoscience Australia used data from some of the 321 international monitoring stations—including in Australia—to promptly identify the six nuclear explosions conducted in North Korea since 2006 and to estimate the yield and location of each explosion.

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DFAT Annual Report 2018-19

The department helped fund emergency sexual and reproductive healthcare to evacuees during the 2018 Ambae volcano response in Vanuatu [IPPF/Alana Holmberg]

Deliver an innovative development assistance program

Report on performance

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Deliver an innovative development assistance program

Australia’s development assistance is essential to our vision of an open, inclusive and prosperous Indo-Pacific. It delivers results and serves our national interests by contributing to sustainable economic development and poverty reduction.

The majority of our neighbours are middle-income countries with enormous potential. Most are navigating the challenges, vulnerabilities and risks that

come with a growing economy. Each faces different challenges, so country context and their priorities shape our support.

We magnify Australia’s ability to affect pressing regional and global problems through our development program— bilaterally, regionally and in multilateral forums. This includes our efforts to meet the Sustainable Development Goals.

A rigorous performance framework— Australian aid: promoting prosperity, reducing poverty, enhancing stability—ensures our development assistance is effective, transparent and value-for-money.

Figure 11 DFAT offi cial development assistance

Southeast and East Asia $850 million

Paci fi c $1.2 billion

South and West Asia $308 million

Middle East and Africa $280 million

Latin America and the Caribbean $7 million

Total

$3.9 billion

Other ODA not attributable to particular countries $1.1 billion

Departmental $255 million

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Growing economies and reducing poverty While the Indo-Pacific is one of the most economically dynamic regions in the world, it is also home to almost half of the world’s poorest people, with nearly 330 million living in extreme poverty in the Pacific and

Southeast Asia. We want our neighbours to do well, as prosperity and stability foster peace and security in our region, and contribute to increased two-way trade.

Performance measures How we rate our performance*

Australian interests are promoted by our development program, including enhanced sustainable economic growth and poverty reduction in the Indo-Pacific.

On track

90 per cent of country attributable aid spent in the Indo-Pacific. Achieved

Source: Corporate Plan 2018-19 p. 16 | Funding: PBS 2018-19 programs 1.2 and 1.3

* Our assessments are informed by independent evaluations, Aid Quality Checks, Aid Program Performance Reports, case studies and delivery of the 90% target using internal data sources.

Our performance

In 2018-19 the department delivered $3.9 billion of the Australian Government’s $4.3 billion development assistance program, with other departments delivering the remainder. We delivered 91 per cent of country attributable aid in the Indo-Pacific, above our 90 per cent target. We rate our performance against these measures as ‘on track’, evidenced by rigorous program design, implementation and monitoring processes that ensure we deliver results that contribute to sustainable economic growth and reducing poverty.

Ensuring the department has the international development and aid management capability to deliver our development assistance efficiently and effectively remains a high priority—this is a work in progress.

Pacific

In 2018-19 we took our partnership with the Pacific to a new level. The department’s $1.2 billion investment was our largest annual development spend in the Pacific. A new, dedicated Office of the Pacific is leading our deeper engagement in the region.

Sustaining economic growth, boosting education and jobs, pursuing gender equality, preventing major disease, adapting to climate change and preparing for disasters are major challenges in the Pacific. Overcoming them requires effective, inclusive government, leadership and at times, difficult reforms. Strengthening governance and economic reform are a key focus of our partnerships in the region. Some highlights of our work are outlined in the following pages, but there are many more.

Sustainable Development Goals In July Australia delivered its first report to the United Nations on our progress towards meeting the Sustainable Development Goals (SDGs) by 2030. The 17 goals set out a global approach to reducing poverty, promoting sustainable development and ensuring peace and prosperity. Australia’s Voluntary National Review was a ‘whole-of-Australia’ report that included

efforts made by business, civil society, academia, and communities, as well as by government. Our development program supports partners to make progress towards achieving the SDGs. Country and civil society representatives commended Australia’s inclusion of Indigenous Australians and the business community in its presentation to the United Nations.

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For example, we supported elections in Fiji and Solomon Islands, requested by their governments. Samoa has a new parliament house with Australia’s assistance. The department is promoting the inclusion of women as leaders and decision-makers—and training and mentoring potential candidates—through our 10-year $320 million dollar investment in the Pacific Women Shaping Pacific Development initiative.

Our support is strengthening governance in Papua New Guinea. Through our partnership, improvements to the tax system have allowed Papua New Guinea to increase tax revenue by $130 million. In Vanuatu, our assistance with reforms has boosted government revenue with a 19 per cent increase in receipts from Value Add Tax. Results like these boost resources for partner governments to deliver services such as health and education—also improving the operating environment for the private sector, and laying the foundations for future economic growth.

Justice services have improved in Solomon Islands through the department’s collaboration with local communities and the World Bank. Almost 7,000 Solomon Islanders across two provinces have access to informal justice services. Seventy-seven per cent of those surveyed said they had experienced improvements in community grievance mechanisms.

Another focus of our work is catalysing the private sector to drive economic growth. We are working with Australian businesses and others to develop infrastructure across the region with the establishment of the $2 billion Australian Infrastructure Financing Facility for the Pacific. As the majority funder of the Coral Sea cable from Australia to Solomon Islands and Papua New Guinea, we are helping provide faster, cheaper and more reliable communications infrastructure for both countries. Due for completion in late 2019, this will enable entrepreneurship, digital skills and integration into the global marketplace.

Fiji’s green bond Around 43,000 Fijians in 120 rural communities now have clean water, more than 100 schools have been rebuilt and 170 bridges have been rehabilitated through projects funded in 2018-19 by the Fijian Government’s green bond, developed with support from the department.

Fiji is the first developing country in the world to issue a sovereign green bond. It attracted $26 million in climate finance

when the bond was listed on the London Stock Exchange in April 2018. Drawing finance to the Pacific is important to encourage economic growth and combat the impacts of climate change. Technical assistance to develop the green bond was provided through the $13 million DFAT-International Finance Corporation Fiji Partnership. The bond received the 2018 Green Bond Pioneer Award.

Minister for International Development and the Pacific Alex Hawke with the Crown Prince of Tonga Tupouto’a ‘Ulukalala in Perth at the handover of Tonga’s Guardian Class Patrol Boat [Department of Defence]

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We also focus on improving health and education to reduce poverty and underpin sustainable economic growth. For example, with our support, school grants in Vanuatu have expanded the number of years of education available to over 40,000 primary school children. Enrolment rates have increased, including a 12 per cent increase in kindergarten enrolments.

An example of our work to improve health was our partnership with the Global Polio Eradication Initiative, World Health Organization and UNICEF ($16 million) to immunise 3.3 million children in Papua

New Guinea following an outbreak of vaccine-derived poliovirus. This helped prevent the further spread of the disease. We also supported the partnership between the Medicines for Malaria Venture and the private pharmaceutical company GSK, to develop a new single-dose cure for malaria caused by Plasmodium vivax through our Indo-Pacific Centre for Health Security. This strain of malaria affects some eight million people in the Indo-Pacific. The new cure will help relieve the enormous malaria burden felt in countries like Papua New Guinea and Solomon Islands.

Pacific Island Food Revolution Pacific Island Food Revolution is the reality TV series and multimedia campaign that is encouraging healthy eating across the Pacific. Teams compete to create easy, delicious and healthy dishes, filmed in Fiji, Samoa, Tonga and Vanuatu.

The show is broadcast to over 24 stations across the Pacific and will also be available to Australian and New Zealand viewers. Since its launch in April, Pacific Island Food Revolution has attracted a steady following of more than 22,000 on Facebook.

Research indicates early signs of the program having impact—especially among women—with a 146 per cent increase in preference for healthy traditional options.

The initiative is co-funded by the department’s innovationXchange and New Zealand’s Ministry of Foreign Affairs and Trade, to help Pacific island countries reduce their high rates of chronic illnesses including diabetes, high blood pressure and coronary diseases.

Fijian chefs Shamim Ali and Manasa Bolawaqatabu plate up during an episode of the Pacific Island Food Revolution [PIFR]

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Southeast Asia

Although Southeast Asia is one of the fastest-developing regions in the world, growth is uneven and often inequitable. Our $850 million in development assistance in 2018-19 responded to the diverse needs of the region. In fast-growing economies such Indonesia, the Philippines and Vietnam, we supported difficult governance reforms and facilitated finance for much needed infrastructure. In lower-income countries, we focused on service delivery and poverty reduction.

For example in Indonesia we provided specialist advisers to help improve government systems. Our investments with the World Bank and the Asian Development Bank catalysed an additional $2 billion from international partners to build and maintain better infrastructure. To improve economic governance, we drew on Australian Treasury expertise to support Indonesia to develop its first tax expenditure statement, allowing greater public scrutiny of tax exemptions and creating a more transparent system. Indonesia is only the second ASEAN country to publish a tax expenditure report.

Transport in Vietnam In early 2019 the Government of Vietnam asked the department’s Aus4Transport infrastructure program (worth $30 million over four years) to deliver detailed designs for the Central Highland Connectivity Improvement Project and the Northern Mountain Provinces Transport Connectivity Project. This helped Vietnam access

USD400 million from the World Bank and Asian Development Bank. This 350-kilometre network of critical roadways in four provinces will contribute to economic growth by connecting rural farmers to markets in Hanoi, and supporting the increased demand for tourism in these regions.

Our advocacy and support to policy makers in the Philippines assisted with the passage of a new universal health care law. As a result, the Philippines’ population of 105 million now benefits from the national

health insurance system, receiving free primary health services. This will allow for early detection of illnesses, better chances of treatment and greater protection from financial hardship for poor households.

Village registration officers in South Sulawesi visit a villager in her home to collect information. Australia partners with local governments in Indonesia to improve civil registration and vital statistics so that poor and vulnerable people can access health, education and community services [KOMPAK/Yusuf Ahmad]

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According to an independent evaluation, the department’s focus on institutional governance in Asian middle-income countries has helped facilitate reforms where there is partner appetite (dfat.gov.au/investing-in-regional-partnerships). The evaluators recommended we more clearly articulate the objectives of our economic partnerships to make our development, trade and diplomatic efforts more consistent. They found more ambitious partnerships would be possible if the department had strengthened staff capabilities.

We contributed to the delivery of improved educational outcomes for our partners in

Southeast Asia’s least-developed countries. Our funding in Myanmar supported more than 48,575 monastic and government schools in all states and regions across the country. It also helped more than nine million students get better access to schools, resources and facilities. In Timor-Leste, access to education has improved but teacher quality remains a challenge. We worked with the government to implement a teacher quality program, which is helping to improve the literacy and numeracy of primary school students, including 108 school leaders, 542 teachers and around 12,000 students.

South and West Asia

In collaboration with regional governments, civil society and the private sector we delivered $308 million in development assistance in South and West Asia in 2018-19. We collaborated to build climate change resilience, improve food, energy and water resource management, facilitate increased trade and advance the empowerment of women.

For example, through our South Asia Regional Trade Facilitation Program, the department improved transport infrastructure to increase the flow of goods and services between Bhutan, Bangladesh, India and Nepal. It also enhanced access to markets for mostly rural populations. We expanded women’s economic participation by improving river crossings and island

ferry services, delivering public information campaigns on safety issues for women traders, and developing educational programs for female traders on the law and their rights.

In Afghanistan, in the face of significant security and access challenges, we supported the Afghan Government to deliver basic services to its population. We supported efforts to change community perceptions on violence against women by partnering with The Asia Foundation to train 120 religious scholars and challenge harmful gender norms. Sermons on women’s rights by religious scholars such as these have been instrumental in improving understanding and acceptance of women’s rights, which can in turn help reduce violence against women.

First Assistant Secretary Julie Heckscher and Senior Program Officer Bounmy Souvannalath visiting the Somesavanh Primary School in Vientiane. Our funding supports improved primary education learning outcomes [DFAT]

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Gender equality and women’s empowerment Across the development program, we spent $1.3 billion on investments that helped promote gender equality and women’s empowerment. We aim to incorporate gender equality measures into at least 80 per cent of all development activities. This enhances women’s voices in decision-making and promotes their economic empowerment. We also supported a number of investments to promote gender equality including:

§ awareness sessions on ending violence against women and children, which reached over 20,000 people across Vanuatu’s six provinces. We helped develop the skills of 310 Vanuatu businesses (60 per cent operated by women) across four provinces, improving income generation in key productive sectors

§ providing 49,515 women and girls in Myanmar in 2018 with gender-based violence support and response activities, and reproductive health services. This work is addressing protection concerns of the most vulnerable internally displaced people and host communities

§ our investment in the Impact Investment Exchange Asia’s Women’s Livelihood Bond series—the world’s first listed bond with a dual focus on financial and social returns—provides loans for social enterprises that are women-owned or have marginalised women beneficiaries. The initiative impacted 144,800 women in 2018

§ our gender equality fund ($55 million in 2018-19) which is contributing to innovative investment partnerships to promote women’s economic empowerment.

A teacher from Mainohana Secondary School outside Port Moresby practices delivering a lesson from our Rights, Respect & Resilience project. The project includes lesson plans on basic sexual health knowledge and skills, gender rights and respectful relationships, self-care, peer support and access to health services [ChildFund]

Children in Madhya Pradesh, central India, where the department is helping to develop the world’s largest grid-connected solar power facility. Around 300 million people in India have no access to electricity. We funded a new financing model, developed by the International Finance Corporation, which has mobilised USD576 million of private investment for the Rewa Ultra Mega Solar project [IFC/Sayantoni Palchoudhuri]

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Figure 12 DFAT offi cial development assistance priority sectors, estimated outcome

General development support

$201 million

Building resilience

$688 million

Health

$548 million

Education

$641 million

Agriculture, fi sheries and water

$277 million

Eff ective governance

$699 million

Infrastructure and trade

$713 million

(*) excludes departmental expenses and adjustments

Africa and the Middle East

While the Indo-Pacific is our primary focus, we deliver targeted development programs outside our neighbourhood to meet our national interests and those of our partners. In 2018-19 we delivered $247 million to countries outside the Indo-Pacific.

Our programs in Africa build enduring people-to-people links with Australia, support economic engagement and promote gender equality. The Australia Awards are our largest African development investment, promoting capability, increasing awareness of Australia and building life-long relationships. In 2018-19 about 480 outstanding professionals from government, civil society and the private sector completed courses in Australia, gaining skills to contribute in their home countries and exposing them to Australian enterprises. An independent evaluation

in 2018 of Australia Awards in Africa (dfat.gov.au/australia-awards-in-africa-in dependent-mid-term-evaluation) found the program is strengthening developing country capacity in line with Australia’s foreign policy objectives.

We supported the Middle East peace process and aspirations for an agreed two-state solution to the conflict between Israel and the Palestinians through our development assistance to the Palestinian Territories. Our $43 million program in 2018-19 supported basic services including health and education, and livelihoods for Palestinians, promoting stability and economic growth. This program also contributed to increasing the economic independence and self-sufficiency of women in the Palestinian Territories through projects that directly supported the economic power of women and girls.

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Disability inclusion People with disability are among the poorest and most marginalised of groups in developing countries. Their inclusion as active participants in development processes benefits families and communities, reduces the impacts of poverty and contributes to a country’s economic growth.

Australia is an international leader in disability-inclusive development and was the first donor country to have a strategy to make development assistance disability-inclusive. An independent evaluation of our strategy (dfat.gov.au/ development-for-all-evaluation) found progress is being made—about 40 per cent

of our investments are disability-inclusive— with important contributions to improving the lives of people with disabilities. Efforts in other areas have been less successful, reflecting the difficulty of the challenges to be addressed.

The department received an award from the International Disability Alliance for outstanding contributions for the advancement of the rights of persons with disabilities. Our international advocacy is credible, effective and influential. For example, with Australia’s support, the United Nations launched a new disability inclusion strategy in June 2019.

Working with others

By collaborating with multilateral organisations, the private sector, non-government organisations and, importantly, leveraging the skills and know-how of Australians, we expand the reach and impact of our development program. We are selective in our choice of partners, working with those that can bring the greatest value to our region.

Multilateral partners

Our closest partners in the region rely on multilateral organisations for large-scale finance and infrastructure analysis and expertise. In 2018-19 we worked with the Asian Development Bank and World Bank Group to deliver more finance to the region. Asian Development Bank concessional finance to 12 Pacific countries increased by USD168 million, bringing the total value of its Pacific portfolio to USD2.9 billion. Fiji gained access to concessional funding from the World Bank this year—a change we have advocated for strongly—and will receive an extra USD21 million annually to recognise its vulnerability as a small island economy. This means Fiji will gain access to support from other funding sources too, including being eligible for rapid funds in the aftermath of a natural disaster to help with response and recovery.

In 2018-19 we invested $584 million in economic infrastructure and access to infrastructure finance. This included support for the World Bank’s Global Infrastructure Facility and the Private Infrastructure Development Group (PIDG). Our partnership with PIDG helped develop close to 30 projects across South and Southeast Asia, mobilising an additional USD170 million in private capital investments. This will support sustained economic growth in the region by boosting energy production, improving waste management and extending agriculture production.

In addition to leveraging financing and expertise, multilateral organisations can achieve economies of scale that no individual actor can achieve alone. This is most evident in the health sector where pooling procurement of health commodities has provided countries in our region with access to better prices. We provided $220 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria—the world’s largest multilateral funder of health programs in developing countries. We also supported Gavi, the Vaccine Alliance, pledging $250 million to its 2016-2020 replenishment. Independent reviews of Gavi activities show that every US dollar invested in vaccines saves USD18 in terms of healthcare costs, lost wages and lost productivity due to illness.

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The private sector

We work with private sector partners in more diverse and varied ways, identifying opportunities for new forms of collaboration and innovative approaches to development challenges. For example, our Business Partnerships Platform has benefited 5.37 million people (54 per cent women) across 14 countries through 23 partnerships, and our investments through the innovationXchange continue to yield lessons on new ways of working.

In partnership with cruise ship company Carnival Australia and social business consultancy The Difference Incubator, the department aims to accelerate more than 10 tourism businesses in Vanuatu—creating jobs and investment—through a Pacific Tourism Development Pilot (marketed as YuMi Tourism Partners). The pilot won a national Shared Value Award and has the potential to generate $1.5 million in economic impact annually in Vanuatu.

Another example is our partnership with the New Zealand Government and the International Finance Corporation to develop a new training and recruitment program for SolTuna, a large Solomon Islands company. SolTuna employs over 1,800 workers, 64 per cent of them women, but absenteeism and high staff turnover

held back the company’s productivity. By addressing issues such as family health and violence, and low financial literacy, staff working conditions improved and absenteeism substantially reduced. Company earnings rose by $1.58 million through increased productivity. The number of women in management or leadership roles more than tripled from nine to 32. The number of women in jobs traditionally held by men more than doubled.

Civil society

Non-government organisations (NGOs) are vital partners in our efforts to encourage greater prosperity and stability in our region. Australian, international and local NGOs have been key partners in the development program for more than 40 years, working together to support sustainable economic growth and reduce poverty. NGOs have strong connections to local communities, access to remote, fragile and conflict-affected areas, and deep development expertise.

Our Civil Society Water, Sanitation and Hygiene Fund supported 13 civil society organisations to deliver 29 water, sanitation and hygiene projects in 19 countries in Asia, the Pacific and southern Africa. Over five years, the fund improved services for 4.31 million poor and vulnerable people including

Registered nurse Miriam Nampil receives the first vaccine delivered by drone to Cook’s Bay in Vanuatu in December 2018. The department’s innovationXchange supported a project using drones to deliver vaccines to remote villages [UNICEF]

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73,000 people living with disabilities. It did this by strengthening the capacity of people from communities, government and the private sector to deliver water, sanitation and hygiene services.

For example, iDE provided access to new toilets to 700,000 people in Cambodia— more than double the original target. iDE not only promoted the use of toilets in the community but also worked with businesses to provide affordable solutions such as producing Lego-like interlocking bricks that minimised the need for mortar and saved time and money.

Australian NGO Cooperation Program

The department’s Australian NGO Cooperation Program (ANCP) provided $132 million to 57 accredited NGOs to implement 454 projects in 2018-19. A total of 2,000 local partners in over 60 countries participated in project delivery. Eighty per cent of ANCP’s work is in the Indo-Pacific, with the remainder predominantly in Africa. Projects included:

• teaching children about respectful relationships

• coordinating menstrual hygiene and family planning services to help girls stay in school

• empowering women to be involved in climate change decision-making

• supporting dignified and safe repatriation for refugee women.

Australian Aid: Friendship Grants

The $3.5 million inaugural round of Australian Aid: Friendship Grants enabled 46 community organisations from across Australia to expand or enhance their international development work in 15 countries in the Indo-Pacific. We partnered with Australian community organisations, leveraging their influence and expertise to boost our program effectiveness. Friendship Grants support strong relationships in the Indo-Pacific and make a tangible difference to people and their communities. Outcomes from the first round include:

• disadvantaged women in Nepal received hospitality training to boost job opportunities

• women in Papua New Guinea were taught how to sew reusable and affordable sanitary kits to help generate income for local community groups

• improved water supply in Solomon Islands through drilling wells.

Australian Volunteers Program

In 2018-19 the Australian Volunteers Program continued delivering results. We deployed over 1,000 skilled Australians to support 600 partner organisations across 26 countries, helping communities and boosting strong people-to-people links. Fifty per cent of volunteers went to Asia, 41 per cent to the Pacific and Timor-Leste, and nine per cent to Africa. Australian volunteers are a tangible expression of Australia’s engagement in the region.

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Responding to humanitarian crises and building resilience Humanitarian crises undermine growth, reverse hard-won development gains, increase poverty, and can result in long-term instability. Such crises can have profoundly negative consequences for regional trade and health security.

Our region is among the most disaster-prone in the world, and climate change is exacerbating this trend.

Australia is a leader in disaster response because of our capacity to quickly mobilise humanitarian relief supplies— including Department of Defence assets and personnel—as well as humanitarian expertise, shelter materials or emergency medical teams.

Performance measure How we rate our performance *

Timely and effective responses to humanitarian crises, including an enhanced Indo-Pacific ability to prepare, respond and recover from crises. On track

Source: Corporate Plan 2018-19 p. 17 | Funding: PBS 2018-19 programs 1.2 and 1.3

* Our assessment is informed by after action reviews, independent evaluations, partner reporting and feedback from partner governments.

Our performance

In 2018-19 the department provided approximately $410 million to help communities affected by humanitarian crises and to boost the capacity of countries in our region to prepare for and become more resilient to disasters. We ensure Australia meets its commitment to respond to requests for assistance within 48 hours. We rate our performance against this measure as ‘on track’.

The department manages a $50 million Disaster READY program that supports the preparedness of Pacific and Timor-Leste communities for natural disasters. The program helped establish safe evacuation centres across Solomon Islands, strengthened early warning systems in Timor-Leste, developed provincial preparedness plans in Papua New Guinea and supported tsunami drills in Vanuatu. Just two months after the drills, communities reacted to a real tsunami alarm, moving swiftly to higher ground.

Through our Australia Assists program, the department deployed 87 civilian specialists to support humanitarian efforts, including 38 working with Pacific governments and communities on issues such as disaster risk management, gender and disability, and election monitoring. For example, the department deployed 10 humanitarian

specialists to support the Vanuatu Government’s response to the Ambae Volcano disaster in August. Following significant volcanic activity the specialists helped to develop and implement a plan to evacuate 8,500 people from Ambae to neighbouring islands.

The department fosters a ‘Pacific supporting the Pacific’ approach where countries help their neighbours when disasters strike. Our support helped the Fiji Emergency Medical Assistance Team (FEMAT) become the first WHO-verified team in the Pacific. FEMAT can now mobilise a self-sustaining field hospital and team of 20 highly trained doctors, nurses and logisticians to be more agile, responding to Pacific emergencies within 48 hours.

We demonstrated the value of disaster preparedness when Super Typhoon Mangkhut struck the Philippines on 15 September. More than 1.5 million people were affected, with 127 fatalities. We responded rapidly when the Philippines Government asked for our help and released pre-positioned humanitarian supplies to the Philippines Red Cross. This supported 5,000 families in the 10 most affected provinces. Days later we released a further contribution of prepositioned sexual and reproductive health kits through the United Nations Population Fund to support over 1,000 pregnant and breastfeeding women.

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Sulawesi earthquake On the evening of 28 September, a 7.7 magnitude earthquake rocked the island of Sulawesi in Indonesia unleashing a tsunami that affected more than 2.4 million people. The Indonesian Government declared the death toll to be 4,340 people and at least 240,000 were displaced.

We were one of the first to respond. Within 24 hours, nine C-130 Australian Defence Force aircraft began transferring relief supplies from Darwin to Indonesia, providing shelter kits, tarpaulins, blankets and generators for around 30,000 people.

The department coordinated the whole-of-government effort, providing a $10.25 million package of assistance delivered with the Indonesian Government, the ASEAN Coordinating Centre for Humanitarian Assistance and local civil society organisations such as the Indonesian Red Cross.

Our funding helped United Nations and non-government partners deliver health,

sanitation and hygiene solutions for more than 165,000 people. Under the department-led Australian Humanitarian Partnership, our NGOs worked with Indonesian partners to ensure the most vulnerable—including women, children and people with a disability—were not left behind.

A woman in Donggala District, Indonesia, waiting for the distribution of relief supplies supported by Australia, following the Sulawesi earthquake [CARE/PKPU Human Initiative/ Wiwik Widyastuti]

Australia is working with Myanmar, Bangladesh, other regional partners and the broader international community towards a long-term and durable solution to the Rohingya crisis. With 700,000 Rohingya forcibly displaced from Myanmar since 2017, there are now over 900,000 Rohingya refugees in Bangladesh. The department provided $60 million to Bangladesh and $24 million for the Rohingya crisis and other crises in Myanmar in 2018-19. This funding supported counselling and medical services to women and girls who had experienced violence, food and nutrition focusing on children under five and breastfeeding women, and clean water, shelter and health and sanitation services.

The humanitarian situation in Afghanistan continued to deteriorate. In April 2018 a drought was declared across two thirds of the country, creating food security challenges for 13.5 million people, of whom 3.6 million face critical food shortages. In partnership with the World Food Programme, we provided lifesaving food and water to 5.25 million Afghans in drought-affected provinces. Working with the International

Organization for Migration, we assisted over 2,000 vulnerable families (11,536 individuals) who returned to Afghanistan in 2018-19. Our funding is governed by a three-year strategy, providing certainty to a small number of partners who are addressing the protracted crisis, principally along the Afghanistan- Pakistan border.

We are delivering our $220 million, three-year Syria Crisis Humanitarian and Resilience Package. We assisted conflict-affected populations in Syria, and supported Lebanon and Jordan to promote more sustainable futures for the refugees and host communities within their countries. Support included food assistance, improved access to education, inclusion of people with disabilities, women’s empowerment and protection from sexual and gender-based violence. A 2019 independent evaluation found our investment was well designed (dfat.gov.au/syria-humanitarian-response). It found our funding methods, geographic focus and inclusion of resilience programming—as well as our humanitarian assistance—was appropriate.

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Effective, transparent and efficient The department has a strong focus on performance reporting, evaluation, innovation and research, recognising that Australians want assurance that taxpayer funds are used appropriately and in ways

that are in our interests, and that funds are not diverted from their intended purpose. Our development program is subject to regular and extensive oversight of financial and program accountability.

Performance measures How we rate our performance *

An effective, transparent and efficient aid program in line with the Australian aid program’s performance framework, Making Performance Count. On track

Source: Corporate Plan 2018-19 p. 17 | Funding: PBS 2018-19 programs 1.2 and 1.3

Achievement of significant development results and demonstrated organisational effectiveness, including progress toward the strategic targets contained in the Australian aid program’s performance framework, Making Performance Count.

On track

Source: PBS 2018-19 programs 1.2 and 1.3 p. 30 and 31 | Funding: PBS 2018-19 programs 1.2 and 1.3

Detailed reporting against the performance framework, including individual program and investment performance and multilateral replenishments, will be published annually in the Performance of Australian Aid report.

Acheived

Source: PBS 2018-19 programs 1.2 and 1.3 p. 30 and 31 | Funding: PBS 2018-19 programs 1.2 and 1.3

* Our assessments are informed by independent evaluations, Aid Quality Checks and Aid Program Performance Reports, Aggregated Development Results and delivery of the Performance of Australian Aid report.

Our performance

Our high-quality development program is underpinned by a comprehensive planning, management and reporting system. In its 2018 review of the Australian development program, the OECD Development Assistance Committee commended the program’s clearly articulated and comprehensive performance monitoring system.

Assessment of our development program and the results we achieve is extensive, rigorous and systematic—with independent checks and balances. Every year, we produce Aid Quality Checks for investments worth more than $3 million. We publish the results on our website in Aid Program Performance Reports (dfat.gov.au/ aid-program-performance-reports) along with independent evaluations of investments. This reporting culminates in the annual Performance of Australian Aid report—detailing our progress towards the aid program’s 10 strategic targets, the performance of country, regional and global programs, and presenting performance data for the six priority investment areas of the aid

policy framework. The 2017-18 Performance of Australian Aid report was published in April 2019 (dfat.gov.au/performance-of-australi an-aid-2017-18). Results for 2018-19 will be published in the Performance of Australian Aid report in early 2020.

The department’s Office of Development Effectiveness monitors the Australian aid program’s performance, evaluates its impact and contributes to international evidence and debate about development effectiveness.

Aid investments are carefully designed and implemented, but are not always as successful as planned. Our monitoring and evaluation systems identify underperformance, and remediation plans are put in place. If these plans fail, investments are cancelled. In 2017-18 Aid Quality Checks, 17 investments were identified as underperforming. By 2018-19, 10 of these had improved their performance, two were completed and five investments had to be cancelled. This year of the 367 investments over $3 million, 10 have been identified as underperforming. Six of these are continuing with remediation plans in place.

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Figure 13 Aggregate development results 2018-19

Education

765,912 Additional girls and boys enrolled in school

58,381

Teachers trained to improve learning outcomes (women and men)

4,290

Women and men assisted to gain recognised post-secondary qualifi cations

Health

28,654

Additional births attended by a skilled birth attendant

2,009,903 Girls and boys vaccinated

1,841,396

Women and men with increased access to basic sanitation

757,786

Women and men with increased access to safe water

Infrastructure, trade facilitation and international competitiveness

2,897km Distance of roads constructed, rehabilitated or maintained

3,968

Women and men trained in trade policy and regulation

AUD 63,356,035 Value of exports facilitated, including new exports

1,925,802

Poor women and men who increase their access to fi nancial services

Agriculture, fi sheries and water

1,598,752

Poor women and men who adopt innovative agriculture and fi sheries practices

USD 240,423,340 Value of additional agricultural and fi sheries

production

Gender equality and empowering women and girls

7,978

Management committees in which women are equally represented

52,137

Women survivors of violence receiving services such as counselling

Eff ective governance

9,388 Police and law and justice officials trained (women and men)

225,199

Additional poor women and men able to access social transfers (e.g. cash or

in-kind transfers)

4,335,697 Vulnerable women, men, girls and boys provided with life-saving assistance in

crisis and confl ict

3,258,925 Poor women and men with increased incomes

Building resilience: humanitarian, disaster risk reduction and social protection

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Minister for Foreign Affairs Senator Marise Payne addresses the 73rd session of the UN General Assembly in September 2018 [United Nations/Loey Felipe]

Advance global cooperation

Report on performance

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Advance global cooperation

The international rules-based order has served Australia’s national interests, promoting global stability, peace and prosperity. It is experiencing unprecedented pressure from shifts in global power and greater contestation. At the same time, the world faces critical economic, security and environmental challenges that need urgent attention and can only be solved collectively. Australia’s interests are strongly served by multilateral cooperation to solve global challenges.

In an uncertain world, the strength and diversity of our bilateral and regional

partnerships in the Indo-Pacific and beyond builds our influence and spreads our risk. The department works closely with other Australian Government agencies to invest in these relationships and to forge coalitions in pursuit of core Australian interests.

Key to the department’s ability to pursue our national interests is harnessing Australia’s soft power—the ability to influence the behaviour or thinking of others through the power of attraction and ideas. We work with a diverse range of partners to build our international reputation and influence.

Shaping international rules and norms Australia’s interests are strongly served by acting with others to support an international rules-based order. The department leads Australia’s engagement in the multilateral system. We aim to

promote its liberal character, including free trade and human rights, and to prevent efforts by others to reshape rules, norms and institutions in ways that challenge our interests.

Performance measures

How we rate our performance*

Australia helps shape the evolution of institutions, rules and forms of cooperation in line with our national interests.

On track but progress towards shaping international rules and norms is under strain

Source: Corporate Plan 2018-19 p. 18 | Funding: PBS 2018-19 programs 1.1 and 1.4

The department’s contributions shape multilateral outcomes, institutions and norms to advance the interests of Australia and our Commonwealth partners. On track

Source: PBS 2018-19 program 1.4 p. 32 | Funding: PBS 2018-19 programs 1.1 and 1.4

* Our assessments are informed by international resolutions and statements, diplomatic reporting, membership of multilateral bodies and tracking implementation of Australia’s Strategy for the Abolition of the Death Penalty. See p. 41 for our contribution to the multilateral trading system and p. 72 for our development cooperation work with multilateral partners.

Our performance

On balance we rate the department as ‘on track’ against the performance measures listed. However despite our best efforts, multilateralism, institutions and

the rules-based order are under significant strain. We set out below where we have made some inroads or avoided sliding backwards on issues of key national interest.

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Human rights

Australia used its membership of the UN Human Rights Council (2018-2020) to champion human rights principles and respond to serious concerns in specific countries. The Foreign Minister’s address to the council in February underscored Australia’s commitment to the rules and institutions which promote and protect universal human rights.

In the five Human Rights Council sessions since Australia took up membership (from February 2018 to July 2019), the department worked across government—and with civil society and international partners—to negotiate 141 resolutions (co-sponsoring 87), deliver 123 national statements and join 81 joint statements to advance thematic and country-specific human rights issues and norms. We stood up for the rights of women and girls, indigenous and LGBTI people. We promoted good governance, freedom of expression, strong national human rights institutions, freedom of religion or belief and civil society engagement.

With few Pacific states represented on the council, the department worked closely with Pacific island countries to lead joint statements, to convey their views and highlight the actions we have taken together on issues such as slavery-like practices in the fishing industry and on tackling the barriers faced by people with disability.

The department advocated for ongoing Human Rights Council reform and diverse membership to ensure the full range of human rights challenges are considered. Upon taking up the Human Rights Council seat, we initiated an incoming members’ pledge—committing new members to strengthen the council’s effectiveness and credibility through cooperation, transparency and objectivity. This will be a legacy of our term. The department worked with new member Fiji to ensure countries joining in 2019 also signed on, with Fiji delivering the pledge on behalf of 10 of the 17 members elected to the council for the 2019-2021 term.

The department launched Australia’s Strategy for Abolition of the Death Penalty in October 2018. We increased our advocacy— bilaterally, multilaterally and in partnership with civil society—to highlight Australia’s opposition to the death penalty, in all circumstances for all people.

We became a full member of the support group of the International Commission Against the Death Penalty in November. Our efforts reinforce global momentum towards abolition. Australia was also accepted as a member of the International Holocaust Remembrance Alliance (IHRA) in June 2019. Through IHRA, governments and experts work to strengthen holocaust education, research and remembrance and to identify early warning signs of present-day genocide.

Gender equality

Promoting gender equality was a priority for us during the year. We advocated strongly in support of existing rules and norms underlying women’s sexual and reproductive health and rights. For example, our efforts at the 63rd UN Commission on the Status of Women in March ensured that key agreements maintained hard-won references to women’s human rights, despite strong opposition and pressure to remove and weaken these references.

We influenced discussion on the underrepresentation of women in peacebuilding processes and decisions. The UN Secretary General’s report on Women, Peace and Security in 2018, and the UN Security Council open debate, were informed by Australian research from Monash University, funded by the department. This found only 19 per cent of 1,187 peace agreements reached from 1990-2017 contained references to women.

As part of our efforts to increase women in leadership positions in peacekeeping, we worked with the Department of Defence in securing a position for Major General Cheryl Pearce as Force Commander to the UN Protection Force in Cyprus.

In the Pacific, the department is contributing to multilateral efforts to protect women and girls from violence. We supported the Women’s Peace and Humanitarian Fund, which works to improve the safety of women in humanitarian crises. We joined a new partnership with the European Union, UN Women, the Pacific Islands Forum Secretariat and the Pacific community, which is tackling the social norms that allow violence against women to continue.

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Climate change

As Chair of the Umbrella Group—one of four major groups that includes the United States, Canada, Japan, Russia and others— Australia was influential in securing a robust set of rules for implementing the Paris Agreement on climate change. In December at the UN climate change conference (COP24) in Poland, countries adopted a common global approach to implementing the Paris Agreement for years to come.

The rulebook is a win for the global rules-based system. It provides business with certainty and confidence for climate action, will ensure investment and public sector finance can flow, and helps maintain confidence in the Paris Agreement. For the first time it introduces a set of rules that will apply to all countries, including major emerging economies and key emitters such as China and India.

Australia is delivering on its commitment to provide $1 billion of climate finance over five years (2015-2020) to support developing countries build climate resilience and reduce emissions. This includes our $300 million commitment to the Pacific on climate and disaster resilience, which we are on track to meet. A further $500 million over five years has been pledged for the Pacific, starting in 2020-21.

Strengthening international law

This year, led by the department, Australia was an active player in shaping a new UN treaty on high seas biodiversity and marine genetic resources. This will enable integrated management of around 60 per cent of the world’s oceans in areas beyond national jurisdiction. Countries are aiming to finalise the UN treaty on high seas biodiversity and marine genetic resources by 2020.

The department led Australia’s international engagement in the Antarctic Treaty system. With other countries, we have been encouraging Antarctic Treaty signatories that have not already done so to adopt the Madrid Protocol which prohibits mining indefinitely. Six countries have joined since 2011 and others are in the process of signing on.

We are working through regional organisations to protect and strengthen the UN Convention on the Law of the Sea (UNCLOS), the foundation for responsible international use and management of our oceans. Australia and Malaysia co-chaired an East Asia Summit seminar on maritime security and international law and security, and we co-chaired with Vietnam an ASEAN Regional Forum workshop on implementing UNCLOS.

The department hosted the first Pacific Maritime Law Exchange in February, bringing together participants from Pacific island countries and regional organisations to establish a deeper understanding of priorities and challenges.

We worked to strengthen the International Criminal Court and its ability to try individuals responsible for the most serious international crimes. The department continued support for the Syria accountability mechanism and supported establishing an international mechanism in relation to Myanmar. These mechanisms are mandated to collect and preserve evidence of serious international crimes and facilitate future prosecutions.

We implemented sanctions to address situations of international concern and to influence and penalise those responsible. In 2018-19 the department implemented new UN Security Council sanctions in relation to South Sudan. We also imposed autonomous sanctions against five Myanmar military officers responsible for human rights violations, and against seven Russians for their role in the interception and seizure of Ukrainian vessels attempting to pass through the Kerch Strait.

We are working to strengthen the rules and norms of responsible state behaviour as they apply to new and emerging domains, such as cyberspace and outer space. Under the government’s National Counter Foreign Interference Strategy we are implementing a strategy on foreign interference to develop and influence international norms on what constitutes unacceptable conduct.

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Pursuing justice for victims of MH17 Australia continues to pursue justice and accountability for the 2014 downing of Malaysian Airlines flight MH17, with 298 victims, including 38 Australians.

In June the MH17 Joint Investigation Team announced the prosecution of four individuals for their alleged roles. Australia is represented on the team, along with authorities from Belgium, Malaysia, the Netherlands and Ukraine.

The department is administering up to $50 million over four years to support the

Dutch prosecution. We are ensuring families and loved ones of the Australian victims will be able to follow the trials through translation and live-streaming, and are preparing to help those who want to attend.

The department is also contributing to efforts to hold Russia accountable for its role in the downing of the flight. Australian and Dutch officials held a first round of talks with Russia in March 2019. We led the Australian delegation to the talks, which also included the Attorney-General’s Department and Australian Federal Police.

Working with the UN and the Commonwealth

The department led a successful campaign this year for Australia to be re-elected to the Council of the International Telecommunications Union, a UN agency that works with governments and industry on decisions on the global communications networks that enable technologies Australians use every day.

We supported the international Responsibility to Protect principle, which seeks to protect vulnerable populations from the crimes of genocide, ethnic cleansing, war crimes and crimes against humanity. We worked in partnership to engage ASEAN and Pacific countries on early warning for conflict and atrocity prevention, supporting, for example, a new youth network that has been tackling local drivers of conflict such as hate speech.

The department drove key management reform, using our positions as a leading investor, member of boards of UN

development agencies, and chair of the UN’s Fifth Committee, responsible for budgets. We advocated for improved budget rigour, accountability and whistleblower protections, increased diversity, and strengthened processes to address sexual harassment and misconduct issues. We supported implementation of the UN’s new autonomous resident coordinator system (which will enable better coordination on the ground by UN agencies delivering services), and continued to urge UN agencies to focus more on the Pacific.

The Foreign Minister is Vice-Chair of the Commonwealth Ministerial Action Group, providing practical support to Commonwealth members to uphold democracy, human rights and the rule of law. This includes training to conduct fair, credible and inclusive elections. Australia’s support also delivered education, training and climate finance in developing Commonwealth countries. Due to the department’s advocacy, the Commonwealth is deploying climate finance advisors to the Pacific.

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Promoting our interests around the world The department works globally to promote Australia’s interests. While the Indo-Pacific is our primary focus (see p. 22-35), we

cooperate with partners around the world to advance our prosperity and to strengthen the international rules-based order.

Performance measures How we rate our performance*

Australian bilateral, regional and multilateral engagement successfully promotes Australia’s interests and values, including in the Indo-Pacific, Europe, the Middle East, Latin America, North America and Africa.

On track

Source: Corporate Plan 2018-19 p. 18 | Funding: PBS 2018-19 programs 1.1, 1.2, 1.3, 1.4 and 1.6

The department’s whole-of-government coordination and leadership shapes bilateral, regional and multilateral outcomes to advance interests of Australia and Australians.

On track

Source: PBS 2018-19 program 1.1 p. 29 | Funding: PBS 2018-19 programs 1.1 and 1.4

* Our assessment is informed by diplomatic reporting, meeting outcomes, implementation of government reviews [JCPOA, Jerusalem], surveys of government stakeholders, agreements and treaties, and evidence used to substantiate performance reporting in the Indo-Pacific, trade, development cooperation and international security sections of this report.

Our performance

We rate the department’s performance against the measures above as ‘on track’. Our engagement with the Indo-Pacific, Europe, the Middle East, North and Latin America and Africa promoted Australia’s interests and values. Our coordination and leadership across government on international issues—and the role that our diplomatic missions play in pursuing whole-of-government outcomes—are referenced throughout this report, including our preparations for Brexit discussed below.

We worked with partners in Europe, including the member states and institutions of the European Union (EU), to advance shared priorities. We led the ratification process for the EU-Australia Framework Agreement and established a joint committee to implement it. The framework will facilitate cooperation, including on foreign policy issues, development, human rights, science and space.

We hosted a conference of senior officials from 30 European and 21 Asian states under the Asia-Europe Meeting (ASEM) framework. With Australia as chair, we focused ASEM discussions on support for an international rules-based order and gender equality and women’s empowerment.

Outcomes from the Australia-United Kingdom Ministerial Consultations (AUKMIN) included closer engagement on Indo-Pacific infrastructure development, strengthening international rules and norms through the UN and the Commonwealth, and Australian support for new United Kingdom diplomatic missions in Samoa, Vanuatu and Tonga.

We prepared for Brexit, coordinating across government to ensure trade continues. We concluded three new treaties with the United Kingdom covering wine, nuclear cooperation and mutual recognition of standards. We will be ready to launch FTA negotiations as soon as the United Kingdom is ready subject to Brexit. The department also developed ‘AFiniti’, a flagship bilateral initiative with France to increase trade, investment, research, education and people-to-people links.

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We worked with like-minded partners to promote adherence to international rules and norms in the face of Russian actions towards Ukraine and elsewhere, including through our engagement with the EU and NATO. We also worked closely with Turkey, a critical partner for Australia’s efforts to mitigate the threats posed by Islamist extremists and foreign terrorist fighters. The department boosted links with the countries of Eastern Europe and the Western Balkans through business connections, tourism and education.

In the Middle East, increased volatility during 2018-19 raised significant risks for international security, including in Australia’s own region. We intensified our engagement with the United States and other partners and advised government on policy responses.

As part of Australia’s contribution to the US-led Global Coalition to Defeat Da’esh, we assisted with the deployment of Australian troops to train Iraqi forces and helped shape coalition strategies following the territorial defeat of Da’esh in March. The department’s policy analysis informed the government’s decision to provide additional aircraft for ongoing operations in Syria.

We supported visits to Iraq by the Governor-General, the Prime Minister and the Defence Minister. These reinforced Australia’s commitment to stability and recovery in Iraq, which the department

is also supporting through multi-year humanitarian assistance packages for both Iraq and Syria.

The department assisted the growth of Australia’s commercial and investment links with the Gulf. The Trade Minister’s visit to the United Arab Emirates in January secured support for Australia’s initiative to develop WTO rules for e-commerce and advanced our growing bilateral economic relationship.

In late 2018 the department was closely involved in the government’s reviews of its policy settings, both on the Joint Comprehensive Plan of Action (JCPOA) on Iran’s Nuclear Program and on the status of Jerusalem. We worked with other government agencies to open an Austrade-managed Australian Trade and Defence Office in West Jerusalem.

In Africa we helped Australian companies pursue opportunities in mining at major international mining conferences in Cape Town and Perth. At the Africa Down Under conference in Perth for example, the department facilitated 124 formal meetings for Australian companies with African delegations that included key decision-makers.

Australia and South Africa agreed on a plan to increase bilateral trade and investment at talks arranged by the department in November. We are working towards implementing the plan in 2020.

Minister for Foreign Affairs Senator Marise Payne and Dutch Prime Minister Mark Rutte meet at the Asia-Europe Meeting in Brussels to discuss strategic matters that affect our two countries [DFAT/Frederic Guerdin]

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We advocated bilaterally for democracy and human rights in Africa and the Middle East. We supported Zimbabwe’s political transition following the end of the Mugabe era, and made representations to select governments against the death penalty and on women’s and LGBTI rights.

We collaborated with Canada, Latin America and the Caribbean countries on issues where our interests intersect, including in the UN, World Trade Organization, Cairns Group, G20, APEC and Antarctic Treaty system. We worked with Canada on WTO reform. The department arranged to share Australian expertise in fields including gun control with Mexico, structural economic reform with Brazil, ocean management in the Caribbean, gender equality and women’s

empowerment with Peru, and engagement in the Indo-Pacific with Chile. The G20 in Argentina generated a series of ministerial visits to countries in the region over the year, facilitated by the department— including by Prime Minister Morrison and the Ministers for Foreign Affairs, Trade and Finance—building Australia’s influence.

In collaboration with Austrade, we launched the Sustainable Mining Centre of Excellence in Bogotá, Colombia. This will manage sustainable development-focused projects using Australian commercial and research expertise and a mix of private and public funding. We worked with an international coalition of like-minded countries to advocate for the return of democracy and rule of law in Venezuela, and to restore the human rights of the Venezuelan people.

Protocol services for the diplomatic corps Our global partners are represented in Australia by the diplomatic and consular corps. Providing them with the immunities, privileges, security and courtesies enshrined in the Vienna Conventions on Diplomatic and Consular Relations is essential to good

relations with their countries and ensuring reciprocal treatment of Australian diplomats overseas. The department’s professionalism projects a positive image of Australia and promotes cooperation in other areas.

Performance measure How we rate our performance*

The diplomatic and consular corps posted or accredited to Australia are satisfied with the delivery of protocol services.

On track

Source: Corporate Plan 2018-19 p. 19, PBS program 1.1 p. 29 | Funding: PBS 2018-19 program 1.1

*Our assessment is informed by the results of the survey of diplomatic and consular corps.

Our performance

As a proactive measure to assess our performance standards the department conducted its first survey of the 108 diplomatic missions in Canberra in early 2019. Sixty-one responses were received, all indicating strong satisfaction with the efficiency, consistency and responsiveness of the protocol services we provide. Fourteen survey responses made specific requests that are being addressed, such

as improving airport facilitation forms for eligible dignitary travel through Australian airports. For other requests which cannot be met for legislative or policy reasons, we will continue outreach to the corps to explain our approach. Figure 14 details the survey results which give us a good benchmark and show us where to focus our outreach.

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Figure 14 Protocol services

9O%

Diplomatic visas

S

98%

Identity cards

S

84%

Bilateral reciprocal arrangements

S

9O%

Airport facilitations

S

96%

Presentation of credentials

S

S Satisfi ed and above

98%

Information in the protocol guidelines

S

95%

Chief of Protocol's quarterly update

S

98%

Protocol Branch responsiveness

S

Soft power and building influence Australia’s soft power assets include our land and people, our unique flora and fauna, our values and institutions, our economy, our education system, and our scientific, artistic and sporting endeavours.

The department harnesses this strength to advance our national interests and project a positive and contemporary image of Australia to build our reputation and influence.

Performance measures How we rate our performance*

Soft power initiatives further Australia’s interests and influence. On track

Source: Corporate Plan 2018-19 p. 19 | Funding: PBS 2018-19 programs 1.1, 1.2 and 1.6

Public diplomacy initiatives build links overseas to further Australia’s interests and increase Australia’s influence. On track

Source: PBS 2018-19 program 1.6 p. 34 | Funding: PBS 2018-19 programs 1.1, 1.2 and 1.6

* Our assessment is informed by the results of audience surveys, diplomatic reporting, an independent evaluation and the interim findings of the soft power review.

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Our performance

Each year we design and implement public diplomacy programs and initiatives, tailor-made to appeal to our overseas audiences and increase Australia’s influence. Taking budget realities into account, we have rated our performance against the measures above as ‘on track’.

In 2018 the department’s flagship public diplomacy program Australia now substantially lifted Australia’s profile in Japan. A total of 427,000 people attended a series of major events across 29 Japanese cities and prefectures, generating 400 media articles and two million social media posts. It sparked new interest in cooperating with Australia in agritech, medical research, life sciences and sustainable living.

In 2019 Australia now is being staged in 10 ASEAN countries. We are targeting ASEAN’s young growing population—more than 160 million people aged 15 to 29 live in the 10 member nations. The program

is providing opportunities for young Australians and their ASEAN counterparts to collaborate and exchange ideas and experiences.

Aboriginal and Torres Strait Islander Australians are the custodians of the world’s oldest living culture. This is a unique and significant soft power asset. The department celebrates Indigenous culture and expertise to build cultural connections and influence in our region. 

From July to August the National Museum of Australia’s landmark exhibition Songlines: Tracking the Seven Sisters, was on show in the department’s Canberra headquarters to mark NAIDOC. Our international posts relayed the exhibition’s launch around the world to celebrate the richness of Australia’s Indigenous culture.

We also organised visits by 20 Indigenous women from diverse fields to 17 countries. This initiative received widespread and positive media coverage in the countries they visited.

Pacific friendships through sport Australians and Pacific islanders share a love of sport. The department is building on a mutual passion for rugby league under the new PacificAus Sports program ($40 million from 2019-2023). In June we partnered with the National Rugby League to stage the first ever women’s rugby league match at the Pacific

Test in Sydney. The Papua New Guinea Orchids played Fiji Bulikula before a crowd of 8,000, promoting gender equality and female inclusion in elite sport. The game was broadcast in Australia, Fiji, Papua New Guinea and New Zealand, and was watched by more than 5,000 viewers on the online platform Kayo.

Shae Dela Cruz in full flight for the PNG Orchids. The department supported the PNG Orchids to play in the Pacific Test [National Rugby League]

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Australia Awards scholarships and short courses are strengthening personal, professional and institutional links between Australia and the Indo-Pacific, while developing future leaders. During the year the department supported 5,700 continuing students, and offered 3,161 new scholarships and short courses to participants from more than 55 developing countries. An independent evaluation of the program’s strategy in 2018 made recommendations to strengthen it, such as having clearer goals, which we are working to adopt (dfat.gov.au/ australia-awards-global-strategy-evaluation).

We are building a network of leaders who are influential advocates for Australia. In the 2018 parliamentary elections in Timor-Leste, four Timorese who were recipients of Australia Awards were elected to office— including the country’s current Foreign Minister. A survey in 2018 of Australia Awards alumni from 2011 to 2016 found 97 per cent became more positive about Australia as a country, and 73 per cent built

networks with Australians or Australian organisations as a result of their experiences in Australia.

Alumni engagement initiatives helped the department activate Australia’s 2.5 million strong global alumni network—including Australia Award recipients and those who have studied in Australia privately— bolstering trade, investment and business links, and strengthening Australia’s diplomatic access and influence.

In 2018-19 for the department’s soft power review, we consulted more than 500 stakeholders across Australia and considered 250 written contributions from institutions, the public and our overseas network. The aim of the review is to set the strategic direction for our public diplomacy and ensure Australia remains a persuasive voice in our region. We expect to release the results in late 2019.

Media relations and digital media

Performance measure How we rate our performance*

Inform and influence media reporting on Australia.

On track

Source: PBS 2018-19 program 1.6 p. 34 | Funding: PBS 2018-19 programs 1.1 and 1.6

Timely management of domestic and international media enquiries.

On track

Source: PBS 2018-19 program 1.6 p. 34 | Funding: PBS 2018-19 program 1.1

* Our assessments are informed by social media monitoring, international media visit surveys, posts’ analysis of overseas media reporting of Australia and internal data sources.

Our performance

We rate the department’s performance against the measures above as ‘on track’. Our international media visits program is shaping debate and understanding of Australia. It is also dispelling misconceptions that may be contrary to Australia’s interests. During the year we brought 27 influential foreign journalists to Australia to showcase Australian expertise

and opportunities for collaboration. For example, a visit organised by the department for seven senior journalists from India resulted in 22 stories about Australia in Indian media, modernising perceptions of Australia’s economy and trade.

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Our history online A digital version of a historic departmental journal is proving to be one of the most popular online records on the National Library’s Trove database.

Current Notes on International Affairs , later Australian Foreign Affairs Record , was a monthly journal published by the department for 60 years from 1936.

It has been digitised and published online by the National Library with funding from the department. In early 2019 it was in the top four records being accessed on Trove, just behind the sports searches.

Our responsiveness to media queries helps shape media coverage of Australia’s foreign policy, and developments overseas affecting Australian interests and our consular work. While we cannot always meet deadlines set by 24/7 media outlets, we rate ourselves as ‘on track’ when it comes to responding to media enquiries within departmental timeframes. The department responded to 2,611 media queries during the year, up from 2,411 in 2017-18. Our overseas posts also replied to hundreds of local media queries. More than 50 per cent of media enquiries related to consular matters, compared with 40 per cent in 2017-18. High-profile consular cases generated the most domestic and international media interest, as did situations in which Australians were affected by natural events, accidents or other difficulties overseas.

We published 417 media releases and statements for portfolio ministers and the department during the year. In a sample dataset, 81 per cent of responses were approved for release within our departmental deadlines. Feedback from stakeholders on the quality of media output continues to be positive.

Figure 15 2018-19 social media presence

3.4 MILLIONTotal number of followers

101

Overseas posts with a social media presence

268

Social media accounts 204 are overseas

Facebook followers up from 2.3 million

2.8 MILLION

Twitter

followers down from 554,000

443,000

Engagements likes, reactions, shares, comments, clicks

5.2 MILLION

Up from 3 million

Three former editors of Current Notes (L to R) Jeremy Hearder, Elizabeth (Warren) Decolongon and Richard Gate [DFAT/ Gina Dow]

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The department’s Charles Thursby-Pelham surveys damage caused by a series of earthquakes that struck North Lombok in July and August 2018 [DFAT/Piter Edward]

Support Australians overseas

Report on performance

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Support Australians overseas

Australians are travelling overseas in unprecedented numbers—and supporting them is one of the department’s most important responsibilities. Demand for our passport and consular services has increased substantially, and providing them has

become more complex. We are committed to providing efficient and responsive services to facilitate travel. We also help Australians who get into difficulty overseas, and require government assistance.

Passports Two-thirds of all Australians have used the department’s passport services. Most applications are made through our agent—Australia Post—which accepts applications at outlets across the country. The department also accepts applications at our passport offices in state and territory capitals from clients with a compassionate or compelling need for emergency travel.

Blank passports are printed by a subsidiary of the Reserve Bank—Note Printing Australia—on the same equipment used to print banknotes. We then personalise more than 8,000 passports every business day, at printing sites in Melbourne, before shipping them to clients around Australia and the world.

Efficiency and integrity of passport system

Performance measure How we rate our performance*

The department maintains a high standard in processing passport applications, investigating and prosecuting fraud:

• 95 per cent of passports are processed within 10 business days Not on track

• 98 per cent of priority passports are processed within two business days Achieved

• 100 per cent of identified high-risk passport applications are scrutinised by specialist staff Achieved

• 90 per cent of administrative investigations are finalised within five business days Achieved

• 95 per cent of referrals to prosecuting authorities are accepted for prosecution.

Achieved

Source: Corporate Plan 2018-19 p. 20, PBS program 2.2 p. 41 | Funding: PBS 2018-19 program 2.2

*Our assessments are informed by the delivery of targets using internal data sources.

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Our performance

Demand for passports continued to rise in 2018-19, a long-term trend. We issued 2,117,518 passports in total. This was a new record and 39 per cent more than a decade ago.

Due to this higher demand, we failed to meet some of our service standards. Although we processed 98 per cent of priority applications within two business days, we only finalised 86 per cent of routine applications within 10 business days, falling short of our 95 per cent performance target.

To address these challenges, we continued to innovate during the year to process passports more efficiently. In October we installed a new, more accurate face recognition algorithm that directs a greater proportion of passport renewal applications to a low-risk workflow with less manual handling. This helped us to manage turnaround times and devote more resources to high-risk and complex applications. We also developed a new IT system to underpin our face comparison algorithms. This helped to streamline our identity verification and passport processing. The new system went live in October reducing the complexity and

support needs of the IT infrastructure we use for face comparison.

We do not allow our search for efficiency to compromise passport integrity. All high-risk applications are individually scrutinised by specialist staff. In 2018-19 our systems led to 35,655 passport applications being referred to our face comparison experts for manual assessment. We identified six cases of passport identity fraud—two related to new applications and four were historic.

The Minister for Foreign Affairs cancelled 78 passports, refused seven passports and suspended two passports in 2018-19 for national security and law enforcement reasons other than in relation to child sex offenders (see below).

Administrative investigations were completed promptly, in less than a day on average. Most investigations related to forged parental consent for child passports—with 106 cases confirmed in 2018-19.

The Commonwealth Director of Public Prosecutions accepted all five referrals from the department. Three of these were accepted for prosecution, one remains under consideration, and in the other case prosecutors decided not to proceed.

Combating child sex tourism In 2018-19 the Foreign Minister cancelled 157 passports of reportable sex offenders, bringing the number of cancellations to 169 under new legislation that started in December 2017. At 30 June police and other authorities had requested a further 3,220 offenders be refused an Australian passport if they were to apply for one.

Australia was the first country to introduce laws to deny passports to reportable sex offenders. Under the

Passports Legislation Amendment (Overseas Travel by Child Sex Offenders) Act 2017 — administered by the department—the Minister for Foreign Affairs must deny passports to reportable offenders when a competent authority (usually state or territory police) requests this. The Act also makes it a Commonwealth offence for reportable offenders to attempt to leave Australia without permission from a competent authority.

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Figure 16 2018-19 Passport statistics

Issued a record 2,117,518 passports: up 39% from 2008-09

Passport held previously: 74% of applicants

Priority passports: 8.7% declining as travellers plan ahead

Online applications: 68% this is the highest to date

Melbourne Wagga Wagga

End to end, the number of passports printed would stretch from Melbourne to Wagga Wagga

14,597,927 Australians have a current passport

39,956

passports reported lost or stolen

34% of applicants were aged 0-5 or +60 more young children and retirees are

travelling

Client satisfaction

Performance measure How we rate our performance*

Clients are satisfied with passport services— including online services—and the department’s security standards:

• 70 per cent of applications are completed online Not on track

• 85 per cent satisfaction rate with Australian Passport Information Service from a client survey Not on track

• 85 per cent satisfaction rate of overall passport services from client survey. Achieved

Source: Corporate Plan 2018-19 p. 21, PBS program 2.2 p. 41 | Funding: PBS 2018-19 program 2.2

* Our assessment is informed by the delivery of targets using internal data sources and quarterly survey results.

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Our performance

The department places a high priority on client satisfaction with its passport services. To measure our performance more rigorously, we moved from annual to quarterly independent surveys conducted by a new provider, ORIMA Research.

Overall 90 per cent of respondents rated the department’s passport services as satisfactory or highly satisfactory, exceeding our target of 85 per cent. However, the survey showed that only 80 per cent of clients who telephoned the Australian Passport Information Service (APIS) were satisfied or highly satisfied

with its performance. This was below our 85 per cent target.

The department is working closely with the Department of Human Services (which manages APIS) to improve client satisfaction. With our encouragement, the Department of Human Services is boosting APIS staff levels to better cope with call volumes and reduce wait times.

Uptake of our online application service is a key measure of its value as an alternative to paper forms. The proportion of clients using online passport applications increased from 61 per cent in 2017-18 to 68 per cent in 2018-19. This was just short of our ambitious 70 per cent target.

Serving remote Indigenous communities Australians in remote Aboriginal and Torres Strait Islander communities can face unique challenges when applying for a passport, such as limited internet access and difficulty obtaining documents to prove identity. We accommodate these needs, for example accepting alternative documentary evidence in place of birth certificates. The Darwin Passport Office works with Australia Post, schools and community organisations to serve Australians in remote locations. It accepts emailed applications from remote

applicants to get pre-assessment checks under way more quickly.

Ashlee Sevior from the Darwin Passport Office flew to Groote Island to help six Indigenous students with their passport applications. As part of a Northern Territory Police initiative—and in recognition of their improved school attendance—the students were travelling to Calgary, Canada, to attend the International Association of Women Police Conference.

Passport officer Ashlee Sevior and Chinelle Bara with her mother Mary-Jane Bara at Alyangula post office [Northern Territory Police Fire and Emergency Services/Debra Blackwell]

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Emergency passports We issued 8,603 emergency passports during the year, helping travellers whose passports had been lost or stolen to continue their journey and to

get home safely. Passport services for Australians overseas are a vital part of the department’s operations.

* from 2017 -18

Los Angeles 432 up 6%*

Paris 424 up 2%*

Madrid 382

down 2%*

Rome 367

down 8%*

New York 312 down 16%*

Figure 17 Top fi ve cities in which emergency passports were issued

World-leading security

Performance measure How we rate our performance*

Australian passport security remains world-leading, including through the delivery of the Passport Series R by 2020-21. On track

Source: Corporate Plan 2018-19 p. 21 | Funding: PBS 2018-19 program 2.2

* Our assessment is based on progress of Passport Series R development.

Our performance

Australia’s current P series passport contains world-leading security features to deter and prevent forgeries, and to detect any alterations.

We are on track to deliver the next generation of Australian passports, called the R series, in 2020-21. It will use new types of material, construction techniques and personalisation equipment to provide greater security and durability. The visa pages will display iconic Australian landscapes and places.

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Consular

The department aims to deliver a responsive consular service—helping Australians most in need overseas and providing up-to-date and accessible travel advice. When there are crises overseas, we are prepared and manage Australia’s response.

We provide a broad range of consular services to Australians who encounter difficulties overseas—depending on individual circumstances and the resources

available. With more Australians travelling the world, we encourage self-reliance and direct our resources to those who need them most. We continue to work closely with industry and government partners to identify and respond to new travel trends.

We are extending our consular reach by opening new diplomatic posts around the world. Cooperating with international partners extends this further.

Helping Australians in trouble

Performance measure How we rate our performance*

Timely, effective delivery of consular services to Australians overseas, including during crises Achieved

Source: Corporate Plan 2018-19 p. 21, PBS program 2.1 p. 40 | Funding: PBS 2018-19 programs 2.1

*Our assessment is informed by analysis of our consular case management database and consular mailbox. Each time a consular official assists Australians overseas, they open a case in our Consular Information System. Our response to crises is covered on p. 101.

Our performance

Despite the significant numbers of Australians travelling or living overseas, the vast majority do not require government assistance. This year the department managed a total of 13,715 consular cases, or about 1,400 cases on any given day of Australians in difficulty overseas.

Our Consular Emergency Centre is an important point of contact—managing more than 48,000 calls during the year from Australians at home and overseas. This was down from 62,000 in 2017-18. We delivered 201,522 notarial services, such as the legalisation of documents, to Australians overseas.

Our diplomats often work quietly behind the scenes, across government and with international partners to help Australians in difficult situations. We manage most cases without any media attention. Sometimes cases will attract public interest. This year our high-level consular capability was demonstrated with the safe repatriation

of eight unaccompanied children from internally displaced persons camps in Syria, and the safe release of an Australian citizen from detention in North Korea. While we do not publish performance information in relation to individual cases for privacy reasons, these high-profile consular cases are examples of the department’s complex consular work.  

Over 75 per cent of feedback received in our consular mailbox was from members of the public who appreciated the professional and caring treatment provided by the department. Negative feedback mostly related to concerns about the cost or inconvenience of notarial services while overseas.

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Table 1 Consular services provided to Australians

2015-16 2016-17 2017-18 2018-19

Australian resident departures1 10,228,000 10,756,890 10,759,300 11,231,700

Cases of Australians hospitalised given general welfare and guidance 1,667 1,701 1,585 1,506

Cases of Australians evacuated to another location for medical purposes 25 14 7 10

Cases of next of kin of Australians who died overseas given guidance or assistance

1,516 1,653 1,671 1,695

Cases of Australians having difficulty arranging their own return to Australia given guidance and assistance

51 52 44 23

Enquiries made on Australians overseas who could not be contacted by their next of kin

5,582 2,546 2,510 4,957 2

Cases of Australians arrested overseas 1,551 1,641 1,540 1,572

Cases of Australians in prison 391 370 386 3713

Cases of Australians given general welfare and guidance 4,957 4,477 4,137 3,5734

Total number of cases involving Australians in difficulty who received consular assistance

15,740 12,454 11,880 13,715

Notarial acts 232,600 219,463 199,448 201,522 5

Total assistance - total number of cases of Australians provided with consular services

248,340 231,917 211,328 215,237

Australians in financial difficulty who were lent public funds

197 211 180 149

1. Statistics for 2015 -16 and 2016-17 draw from ABS data. Statistics for 2017-18 and 2018-19 draw from Home Affairs data. All figures include permanent long-term and short-term departures of Australian citizens and permanent residents.

2. Figure includes crisis-related whereabouts cases including for the Christchurch terror attack in March, and Colombo terror attack in April.

3. This figure shows the total number of cases of Australians in prison during the year.

4. Welfare and guidance figure includes the following sub-categories: general (five), welfare and other serious matters (2,804), theft (257), assaults (268) and child parental responsibility (239) and general (five).

5. Figures include notarial services performed by overseas posts, and services in Canberra and at state and territory offices in Australia.

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Figure 18 Top fi ve countries for consular assistance

* from 2017 -18

Thailand 895 down 7%*

USA 666

down 11%*

Philippines 647 up 10%*

Indonesia 563 down 8%*

China (mainland) 390 down 1%*

Informing travellers

Performance measure How we rate our performance*

Timely and accurate information provided to the public, including on responding to incidents and updates to travel advice. Achieved

Source: Corporate Plan 2018-19 p. 21, PBS program 2.1 p. 40 | Funding: PBS 2018-19 program 2.1

*Our assessment is informed by an analysis of Smartraveller data and case studies.

Our performance

The Smartraveller service is our primary tool to encourage and empower Australians to prepare well and travel safely. The website contains well-informed, local advice and information for 177 destinations. This helps Australians decide where and when to travel, and is often the first source of information for Australians affected by a major incident overseas. The department has a 24/7 capability to update Smartraveller advice. We rate ourselves as having ‘achieved’ our objective of providing timely and accurate information to the public.

During the year we issued 475 updates to our destination travel advisories and five special event bulletins such as for Anzac Day and the Caribbean hurricane season. Following the terrorist attacks in Sri Lanka in April, we updated the Sri Lanka travel advice nine times—in addition to eight Facebook and 12 Twitter posts—as new information became available. In March after the terrorist attack in Christchurch, we provided advice through our social media channels to Australians—within two hours of the attack. We updated the New Zealand travel advice on the Smartraveller website within three hours of the attack.

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Smartraveller website was viewed nearly

25.5 million times in  2018 -19

Facebook fans this year are

182,884

up from 168,800*

Figure 19 Smartraveller website use

Our most visited country pages

* from 2017 -18

Vietnam 408,671 down 10%*

USA

406,384 up 14%*

Thailand 279,046 up 8%*

averaging more than

13,5OO

unique visitors a day

Twitter followers this year are

25,529

up from 23,720*

Sri Lanka 374,157 not in top 5*

Indonesia 618,721 up 17%*

subscribers for email updates were

43O,396 up from 389,000*

We are upgrading our Smartraveller website to make travel advisories easier to read and more accessible. We are also introducing an SMS service to allow subscribers to receive critical updates as quickly as possible, regardless of their location. These improvements are due in November 2019. The department has partnered with industry groups, including the Cruise Line Industry Association and accredited travel agents, to develop an online learning module to promote smarter travel and the services we provide.

We published the 2017-18 Consular State of Play report (dfat.gov.au/ consular-state-of-play-2017-18) on the number and types of consular situations managed by the department. The report is a valuable resource for the media and the public on our work and its limits. We responded to 1,411 media enquiries on consular matters—over half of the total number of media enquiries received by the department.

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Responding to crises overseas Australia is a trusted and reliable partner—helping our neighbours when they need it the most. Our crisis response efforts make an important contribution to regional stability.

Performance measure How we rate our performance*

Timely, effective and well-coordinated implementation of whole-of-government responses to large-scale crises overseas.

Achieved

Source: Corporate Plan 2018-19 p. 21, PBS program 2.1 p. 40 | Funding: PBS 2018-19 program 2.1

* Our assessment is based on lessons learned from our international responses, case studies and a survey of government stakeholders.

Our performance

The department leads Australia’s whole-of-government responses to overseas crises. We ensure we are prepared to provide best-practice, timely and effective responses. The department’s Global Watch Office provides a world-class 24/7 capability to monitor and respond to international events affecting Australia and our national interests.

A comprehensive $1.9 million upgrade of our crisis centre during the year has strengthened Australia’s response and coordination capabilities. We reviewed and tested more than 200 crisis action plans across our global network. The Crisis Preparedness Assurance Team visited Japan, Thailand, Solomon Islands, Bangladesh, Vanuatu and Timor-Leste.

Our Crisis Cadre, based in Australia, responds rapidly to international crises affecting Australians or our neighbourhood. This year cadre members were in the crisis centre and ready to respond within 45 minutes of:

• a dam collapse and flooding in Laos

• an earthquake in Lombok, Indonesia

• an earthquake and tsunami in Sulawesi, Indonesia

• the terror attacks in Colombo, Sri Lanka

• the terror attack in Christchurch, New Zealand.

The department’s Crisis Response Team is a pool of highly trained staff with humanitarian response expertise who can be deployed overseas at short notice. We deployed the team eight times during the year to provide humanitarian, ICT, logistics and administrative and foreign policy expertise. The team provided timely responses to the incidents just listed as well as for the:

• Tham Luang Nang Non cave rescue in Thailand

• Solomon Trader oil spill in Solomon Islands

• Anzac Day commemorations in Turkey and France.

The Crisis Response Team participated in more than 30 joint exercises, including the Australian Joint Warfighting Series and Exercise ARGONAUT in Cyprus, which rehearsed the department’s capability and tested the preparedness and skills of our staff. Held annually, ARGONAUT is one of the world’s largest exercises of its kind, involving core member states and observers from 40 countries.

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Lombok earthquake response The series of major earthquakes which struck the popular holiday island of Lombok in Indonesia in July and August resulted in more than 500 deaths and displaced 430,000 people. When the strongest earthquake (magnitude 7.0) occurred on 5 August, the department’s Consular Emergency Centre fielded more than 90 calls within two hours and over 250 enquiries in total.

The department provided consular assistance to Australians and Canadians who were evacuated from the neighbouring Gili Islands to Lombok by Indonesian authorities. Consular officers from Jakarta and Surabaya were deployed to Lombok Airport to assist.

We led a coordinated inter-agency response, working with Emergency Management Australia to deploy a Disaster Assistance Response Team (DART), which included engineers and other specialists to undertake structural assessments of public buildings.

We also deployed a Crisis Response Team member to liaise with and support the DART.

Australia was the first donor to lend support through local partners at Indonesia’s request. The department’s assistance to the United Nations Population Fund and the International Planned Parenthood Federation helped over 14,000 people. We supported the Indonesian Red Cross to provide essential health services for more than 12,000 people and to build emergency shelters for over 40,000 people.

Australian-funded development programs deployed engineers to mentor and coach 55 Indonesian engineers. They helped assess 123 buildings, including schools and hospitals. The department’s programs supported people to regain legal identity documents so they could access government services, and helped local governments to reprioritise their budgets to pay for reconstruction efforts.

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Accra High Commission is using solar power as the primary energy source—the first Australian mission to do so. Once the final stage of the project is complete the system will deliver 75-80 per cent savings on our electricity bill and pay for itself within 12 months [DFAT]

Provide a secure and effective overseas presence

Report on performance

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Provide a secure and effective overseas presence

Our global diplomatic network enables us to pursue Australia’s interests and to help Australian citizens and businesses overseas.

The department operates in an unpredictable and challenging security environment, and our network of 109 diplomatic posts (with an additional 11 managed by Austrade) is exposed to a range of security threats—from terrorism, politically motivated violence, crime and civil disorder to espionage.

Our efforts to provide a secure and effective overseas Australian Government presence centred on:

• protecting the security of our people and our assets

• equipping our staff to anticipate and manage security risks in their local operating environments

• investing in efficient, cost-effective and fit-for-purpose information and communications technologies

• securing our information and assets from cyber threats

• managing our property estate across diverse geographic regions

• rolling out the largest expansion of Australia’s diplomatic network in 40 years, with new posts in Funafuti (Tuvalu), Kolkata (India) and Shenyang (China).

Security of our network

Performance measure How we rate our performance*

Effective protective security guided by the DFAT Security Framework. On track

Source: Corporate Plan 2018-19, p. 22 | Funding: PBS 2018-19 programs 1.1 and 3.1

Staff engagement with security materials and products, and evidence of risk-based decision-making on security issues using the DFAT Security Framework security risk management tools.

On track

Source: Corporate Plan 2018-19, p. 22 | Funding: PBS 2018-19 programs 1.1 and 3.1

Application of the DFAT Security Framework risk management tools by staff in Australia and overseas.

On track

Source: PBS 2018-19 program 3.1, p. 45 | Funding: PBS 2018-19 programs 1.1 and 3.1

Positive engagement by staff reflected in breach data, contact reporting, security incident reporting, and staff engagement with security awareness materials.

On track

Source: PBS 2018-19 program 3.1, p. 45 | Funding: PBS 2018-19 programs 1.1 and 3.1

*Our assessments are informed by evidence including an independent evaluation, internal audits, survey and implementation of ANAO and Joint Committee of Public Accounts and Audit recommendations.

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Our performance

The department delivered strong outcomes in securing our diplomatic network during the year. We rate our performance as ‘on track’ against these measures while acknowledging that ongoing efforts will be required to embed a robust risk management approach to security across the department’s overseas operations.

Protective security measures

The government’s decision in December to provide $339 million over five years for the department’s Security Enhancements Program will strengthen management of security assets and infrastructure, modernise processes, professionalise security personnel and improve service delivery. In the program’s first year, we progressed interim chancery solutions in Abuja and Tehran and began fitting out the department’s new Global Security Operations Centre in Canberra.

Using risk-based analysis, we upgraded physical security measures to mitigate threats at posts in Abuja, The Hague, Dublin, Riyadh, Singapore, Manila, Tokyo and Hanoi.

We launched the online Security Clearance Management System, resulting in an improved vetting process that will deliver efficiencies and enhanced integrity features. Within six weeks of its launch, more than 200 Change of Circumstance reports were completed using the new system.

We strengthened our security practices and processes in response to reviews by the Australian National Audit Office and the Joint Committee of Public Accounts and Audit into the security of our overseas missions. We responded to both reviews and addressed 12 of the 17 recommendations, with four of the remaining recommendations to be addressed through the Security Enhancements Program, and one to be addressed through the department’s Cyber Security Improvement Program.

Throughout 2018-19 we raised security awareness among staff through outreach sessions and training courses in Canberra and at state and territory offices. We inspected 36 posts and conducted 59 security-related visits to overseas missions, including to support post relocations and refurbishments. Our work was recognised in the 2018 Comcover Awards for Excellence in Risk Management, indicating we are on the right track.

Embedding a strong security culture

Our officers have a high level of security awareness. This was confirmed by results from a survey of 1,148 staff members conducted by an independent research consultant during the year.

We know a positive security culture requires continual reinforcement. We rolled out an innovative communication campaign to engage directly with staff in Canberra and overseas. Our efforts halved security transgressions over November 2018 to January 2019. Security incident reporting also decreased by about 10 per cent from the previous year. Conversely, there was an increase in reporting suspicious, unusual, ongoing or persistent contact with foreign nationals, indicating staff understand the importance of reporting such contact.

While the department has had success in raising security awareness among staff, our efforts to embed a risk management approach to the department’s protective security challenges require ongoing training, advice and support. The DFAT Security Framework provides an agile, risk management approach that gives staff the principles and tools to assess situations and respond according to local conditions. An internal audit found implementation of the framework was mixed. Not all posts completed the new risk assessment reporting requirements on time. We will continue to provide training and work directly with post security officers to improve the quality of security risk reporting.

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Fit-for-purpose and secure information and communications technology

Performance measure How we rate our performance*

Fit-for-purpose and secure ICT systems which support enhanced efficiencies, including the Hub-and-Spoke operating model. On track

Source: Corporate Plan 2018-19, p. 23; and PBS 2018-19 program 3.1, p. 45 | Funding: PBS 2018-19 programs 1.1 and 3.1

Establishing new service provisioning models and emerging technologies to deliver improved ICT capabilities that are sustainable, affordable and fit for purpose.

On track

Source: PBS 2018-19 program 3.1, p. 46 | Funding: PBS 2018-19 programs 1.1 and 3.1

* Our assessments are informed by the delivery of fit-for-purpose ICT solutions and infrastructure, external assurance reports (Accenture, Equate Technology, Infront Systems), internal project reporting and partner agency surveys.

Our performance

We continued to invest in efficient and cost-effective technologies to support our overseas engagement. Effective, reliable and high-performance information and communications technology (ICT) solutions, infrastructure and software are fundamental to enabling the department to deliver outcomes for the government and Australian people into the future.

Our rating of ‘on track’ against our performance measures is tempered by an acknowledgement that we face a significant challenge in our ability to support fit-for-purpose ICT for our expanding overseas network with the finite resources available. We responded to this challenge by implementing our Business Technology Strategy, which has provided an innovative roadmap for aligning ICT capabilities with the department’s future needs.

In May the department’s Strategic Policy Committee endorsed a new principles-based approach for ICT prioritisation. This aims to ensure that ICT investments are targeted, fit for purpose and benefit the highest number of users. This approach increases value for money and ensures we can continue to provide efficient and cost-effective technologies to support operations.

During the year the department provided secure ICT services for 47 partner agencies at 174 sites globally under an ICT memorandum of understanding (see appendix 9).

We focused on investing in technology options and operating models to deliver improved capabilities to support our global and mobile workforce. In 2018-19 we implemented a range of new ICT services including:

• Post-in-a-Box : a secure diplomatic network communications capability to meet the challenges of deploying into crisis situations efficiently and quickly. Post-in-a-Box was successfully deployed and is a proven model for rapid post deployment.

• Rapid application delivery: we implemented a contacts and events application under the rapid application delivery model to 120 locations across the globe. This is an easy-to-use, cloud-based web application that enables staff to manage contacts. We are developing a case management application which will enable effective administration of cases on the go. Both applications will improve business operations by reducing time to manage manual processes, reducing training,

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enhancing information sharing, and improving quality of information and data.

• Data centres: we delivered two fit-for-purpose data centres that provide high availability and disaster recovery

capabilities for our critical services. These significantly enhance our business continuity. The additional redundancy in services reduced disruptions to the department’s business by 29 per cent from the previous financial year.

Post-in-a-Box It is a portable secure diplomatic communications network that is no larger than carry-on baggage.

The department’s award-winning Post-in-a-Box can support up to 100 simultaneous users and offers all the same ICT applications and services as a standard overseas mission.

Post-in-a-Box can be used for:

§ crisis or humanitarian situations

§ ministerial visits

§ international conferences at small posts

§ temporary openings of overseas missions.

Post-in-a-Box has revolutionised the process of establishing small, new or temporary posts and will play an important role in the future expansion of our overseas diplomatic footprint.

The live deployment of Post-in-a-Box to Rabat in Morocco in July 2018 improved performance and productivity of the embassy. We subsequently used it at the Pacific Islands Forum and more recently in Tehran, Abuja, Kolkata and Funafuti.

Post-in-a-Box won the 2019 Public Sector Innovation Award in the Digital and Data category.

Good things come in small packages. DFAT’s Strategy and Architecture Team receive the Australia Day 2019 Achievement Award for Excellence in Innovation for the successful deployment of the Post-in-a-Box mobile ICT services in Rabat [DFAT]

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A mature cyber security posture

Performance measure How we rate our performance*

Maturing the department’s cyber security posture.

On track

Source: PBS 2018-19 program 3.1, p. 45 | Funding: PBS 2018-19 programs 1.1 and 3.1

* Our assessment is informed by tracking implementation of independent review recommendations.

Our performance

Cyberspace remains a high risk operating environment. Our role as the core international policy agency for the Australian Government makes the department a priority target for sophisticated state actors. As technology evolves, so does the capability of cyber actors and their targeting methods. While we are unlikely to ever be completely cyber-resilient, we rate our performance under this measure as ‘on track’.

Our new Cyber Security and ICT Risk Branch led key initiatives including developing a Cyber Security Improvement Program, which enhances the department’s existing cyber security controls and implements new defensive capabilities. This includes technologies relating to:

• vulnerability management

• change detection

• anti-malware

• application whitelisting.

These controls significantly enhanced our ability to detect and prevent cyber intrusion attempts, and reduced our overall cyber security risk.

As part of the Security Enhancements Program, we are developing technical

security controls to help identify and mitigate the risk of unauthorised access to—and use of—our systems.

A November 2017 independent review of the department’s compliance with the Essential Eight Strategies to Mitigate Cyber incidents (E8) identified a number of risks to our operations and made recommendations to further improve the department’s cyber security posture. A number of these recommendations have been or are being implemented.

In February the Australian Cyber Security Centre updated the E8 and corresponding maturity level framework. We are reassessing the department’s compliance with the recently updated E8 model and developing a work program to upgrade our cyber security posture to the highest maturity level.

We conducted training to build additional depth in our ICT workforce. Negotiations are under way for staff secondments to leverage the cyber skills and expertise of key domestic and international Five Eyes partners. We also redeveloped the department’s cyber security awareness training. This was positively received by staff and will be a foundation for future awareness and education campaigns.

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Effectively managing our property

Performance measure How we rate our performance*

The construction and refurbishment of departmental overseas property estate completed within agreed timeframes and budgets. On track

Source: Corporate Plan 2018-19, p. 23; PBS 2018-19 program 3.2, p. 47 | Funding: PBS 2018-19 program 3.2

Completion of the major construction project in Nairobi, leading to occupancy of the new chancery. Achieved

Source: PBS 2018-19 program 3.2, p. 47 | Funding: PBS 2018-19 program 3.2

Management and refurbishment of the domestic property portfolio, including the state and territory offices, to meet government requirements and deliver operational efficiencies.

On track

Source: Corporate Plan 2018-19, p. 23 | Funding: PBS 2018-19 program 3.2

* Our assessments are informed by hindsight reviews, outcomes delivered and tracking the implementation of the Pacific Property Forward Strategy.

Our performance

On balance we rate our performance against the measures related to our overseas work as ‘on track’. We delivered our capital works projects within budget but, on occasion, beyond the agreed program timetable. This reflects the varying complexity of projects and the challenging construction environments in which we operate.

In 2018-19 we completed works in Nairobi, Paris, London, Athens, Abu Dhabi and Funafuti.

The new chancery compound in Nairobi opened on 6 May 2019. This contemporary facility provides all of the high commission’s necessary functions in a highly secure environment.

Globally we delivered more than 19,100 square metres of construction and fit-out works with a lost time injury frequency lower than comparable Australian industry benchmarks. In Nairobi 3,275,000 person-hours of construction work were delivered with no lost time injuries recorded. This is an exceptional outcome in a country with a 20 times greater chance of death on a construction site than in Australia. The Nairobi site was considered by local industry as a best practice model for Kenya.

On 1 July 2019 after 18 months of fit-out works, our tenants in the Australian Embassy, France—the International Energy Agency and the Australian delegation to the Organisation for Economic Co-operation and Development— recommenced operations in contemporary office accommodation and bespoke conference facilities.

We are on track to deliver an interim chancery in Washington in the fourth quarter of 2019.

Our first off-site constructed chancery for the Australian Embassy in Morocco involves manufacturing the building structure in Sydney and shipping this to the Canadian embassy compound in Rabat to be erected. Operations in the new chancery will commence in the first quarter of 2020. Off-site construction of chanceries is an innovative model on which we are collaborating with industry.

In line with the Pacific Step-up we completed on time and within budget several capital works projects, including the Honiara, Solomon Islands chancery refurbishment and the Suva, Fiji chancery mechanical services replacement project.

We finalised an approach to market which identified a preferred developer to deliver a leased residential compound in Honiara,

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with construction expected to commence in early 2020. We also completed the design work to replace the chancery and five staff houses in Tarawa, Kiribati.

The quality of residential property available in the Pacific is often poor. To guide future upgrades and refurbishments of our residential properties throughout the Pacific, we developed new guidelines, specifying which products should be used to ensure durability, serviceability and sustainability. We trialled the guidelines for residential refurbishments in Port Vila, Vanuatu and Suva. Longer term, they will help achieve consistency in accommodation standards and reduce maintenance costs across the Pacific portfolio.

In a tight budgetary environment, we rate our performance in relation to our domestic property portfolio as ‘on track’ as we delivered a number of improvements, including:

• refurbishing the crisis centre into a state-of-the-art facility that can support coordinated whole-of-government responses to international crises and events

• increasing capacity for the Office of the Pacific to accommodate significant growth in staff numbers

• refitting the Diplomatic Security Division.

Managing our assets

Performance measure How we rate our performance*

Asset management plans are in place for all owned properties in the overseas estate

Achieved

Source: Corporate Plan 2018-19, p. 23; PBS 2018-19 program 3.2, p. 47 | Funding: PBS 2018-19 program 3.2

*Our assessment is informed by the delivery of the target.

Our performance

We ensured that asset management plans were in place for all properties in the department’s overseas estate. The objective of asset management plans is to provide a roadmap to achieve value from the asset and optimise performance over its lifecycle.

Asset management plans inform strategic planning for our property. They provide information on which to base decisions

about acquisition, development and divestment. In 2018-19 we focused on integrating performance metrics on safety, security and foreign policy priorities with property performance metrics, to ensure they align with the department’s strategic objectives. This improved decisions on prioritising and funding programs and projects over the full asset lifecycle.

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Client satisfaction with property services

Performance measure How we rate our performance*

Satisfaction ratings on the performance of the service provider and the Overseas Property Office with specific target of greater than 80 per cent satisfaction.

Achieved

Source: Corporate Plan 2018-19, p. 23; PBS 2018-19 program 3.2, p. 47 | Funding: PBS 2018-19 program 3.2

*Our assessment is informed by survey results.

Our performance

Independent research group ORIMA Research conducted an online survey during the year on client satisfaction with the management of the Australian Government’s domestic and international property network.

Our properties around the world, both owned and leased, are managed by global real estate services provider Jones Lang Lasalle and the department’s Overseas Property Office and Services (OPO).

The 2019 survey received 253 individual responses from 102 locations. It recorded ratings of 84 per cent satisfaction for JLL, and 97 per cent satisfaction for OPO. Improvements were most evident among overseas-based respondents. Responses from staff in Australia have remained broadly consistent over the past five years.

To improve client satisfaction, we stepped up communication with posts and identified issues proactively. During the year, we completed approximately 15,000 preventative and 20,000 reactive maintenance tasks initiated by staff at posts and in Canberra.

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Report on financial performance

Departmental operating result

The department was required to operate in an environment of strong financial discipline to achieve a slim surplus of $2.0 million in 2018-19 before depreciation and amortisation. The financial statements reported an operating deficit of $193.5 million, including depreciation and amortisation expenses of $195.5 million. This tight budget position required careful prioritisation and resource allocation.

The 2018-19 Budget included funding to implement the White Paper, which provides a strategic framework to guide Australia’s international engagement. This includes a commitment to increase our support for a more resilient Pacific and funding for three new Indo-Pacific posts—a consulate-general in Kolkata, India, a consulate-general in Shenyang, China, and a high commission in Funafuti, Tuvalu.

See also Managing our financial resources, p. 128, and the financial statements, p. 131-207.

Revenue

The department reported $1,604.0 million of revenue in the Statement of Comprehensive Income, comprised of:

• $1,439.3 million of appropriation revenue from government

• $156.7 million of own source income

• $8.0 million in gains including sale of assets.

This is a decrease of $38.7 million from 2017-18. The main factor contributing to this movement is a reduction in gain from sale of assets which was partly offset by an increase in appropriation revenue from government.

The department also reported $220.5 million of other comprehensive income arising from asset revaluation movements in the Statement of Financial Position. This is recorded as equity on the Statement of Financial Position and is not incorporated into the departmental operating result.

Figure 20 Summary of departmental expenses

Employee-related expenses $853,458 million

Security expenses $80,822 million

Information and communications technology $99,406 million

Travel expenses $54,227 million

Other expenses $132,051 million

Passport expenses $125,804 million

Property-related expenses $256,138 million

Depreciation and amortisation $195,539 million Total $1,797,445 million

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Expenses

The department reported $1,797.4 million of expenses in the Statement of Comprehensive Income. This is an increase of $100.9 million over 2017-18.

The main factors contributing to the movement in 2018-19 were increases:

• in employee expenses of $55.9 million due to the decrease in the 10-year government bond rate which increased the long service leave provision

• in FBT expenses from the impact of exchange rate movements on overseas allowances and the impact of the two per cent pay rise on salary, superannuation and leave expenses

• of $33.5 million in supplier expenses. This was related to information and communications technology costs associated with specific projects. Increases in property-related expenses relate predominantly to exchange rate movements on overseas property expenses

• in depreciation and amortisation expenses of $8.4 million due to the increased value of the department’s asset holdings. This was offset by a decrease in write-down and impairment costs of $2.8 million.

Assets and liabilities

The department reported a strong net asset position of $4,490.5 million in the Statement of Financial Position, with liabilities equating to less than 11 per cent of the total asset base.

This is an increase of $121.9 million from 2017-18. The main factors contributing to the movement in 2018-19 were the increase in the value of physical non-financial assets due to new purchases and developments, and revaluation movements.

Administered program performance

In 2018-19 expenses administered by the department on behalf of government were $4,063.5 million, an increase of $335.3 million over 2017-18. The majority of the increase is attributed to payments of $170 million for existing multilateral commitments. There was also a loss from

re-measuring multilateral liabilities of $137 million due to changes in the 10-year Australian Government bond rate and foreign exchange fluctuations. Payments to international organisations (including the United Nations) increased by $33 million compared to 2017-18 due primarily to timing of contributions.

The department’s $3,660.4 million administered development program is focused where we can make the most difference: in the Indo-Pacific (see p. 63 for more information on the development program).

In 2018-19 income administered by the department on behalf of government was $647.1 million, which is $401.7 million less than 2017-18. The movement is due predominantly to decreases in reporting on multilateral replenishments of $388.5 million as a result of a change in Australian Accounting Standard AASB 9 Financial Instruments: gains and losses are no longer recognised in the net cost of services, and are now recognised in other comprehensive income. Passport, consular and other fee revenue increased by $21.0 million due to the legislative passport fee increase from 1 January 2019 and an increase in the number of passport applications.

Other comprehensive income was $240.8 million, an increase of $240.6 million over 2017-18.

This is primarily due to a $151.0 million increase in the value of multilateral subscriptions (as assessed by independent experts) and a $94.3 million increase in the value of investments relating to the net assets of Export Finance Australia’s (formerly Efic) commercial account. The income increase was offset by a decrease in a re-measurement of locally engaged staff defined benefit schemes.

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Report on financial performance

Staff of the Australian High Commission in Suva [DFAT]

Management and accountability

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Management and accountability

Senior management committees and their roles The Strategic Policy Committee and Performance, Risk and Resourcing Committee are the department’s primary governance bodies. The Secretary chairs both committees and deputy secretaries and other senior officers are committee members.

The Operations Committee oversees management and effective delivery of the department’s enabling services, including human resources, finance, information and communications technology and property. It provides assurance to the Performance, Risk and Resourcing Committee on operational matters. It has one independent member.

The Aid Governance Board oversees the development program to ensure it is consistent with government policy, achieves development impact and promotes value for money. It acts as an advisory body to the Strategic Policy Committee and Performance, Risk and Resourcing Committee providing strategic and policy advice, risk and performance oversight. It has two independent members.

The Audit and Risk Committee provides independent advice to the Secretary on the department’s financial and performance reporting responsibilities, risk oversight and management, internal control and compliance framework, and its external accountability requirements. It has four independent members including the chair. The Australian National Audit Office attends as an observer.

The department needs to be fit for purpose to pursue Australia’s interests in a fast-changing and more competitive and contested world. We need to think differently about our capability and systems to improve service delivery and meet new challenges. In 2018-19 we intensified our efforts to strengthen our management, service delivery and accountability. For example, we set up the Office of the Pacific to lead Australia’s larger than ever whole-of-government efforts in the Pacific. We are committed to transforming our business processes and to refashioning our overseas operations.

Our enterprise Governance

In January the department established new governance arrangements to improve its decision-making, implementation and consideration of risk and performance.

We created two top-tier committees chaired by the Secretary—the Strategic Policy Committee and the Performance, Risk and Resourcing Committee. These are supported by a new Operations Committee to ensure implementation, and the Aid Governance Board to oversee the development program. By giving staff greater visibility of decision-making, we are boosting efficiency and collaboration.

Our Internal Audit Branch—under the direction of the Chief Auditor—and our Office of Development Effectiveness enhance assurance and accountability across the department.

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The Independent Evaluation Committee (IEC) oversees the work of the Office of Development Effectiveness and provides independent strategic and technical advice. IEC has three external members and was chaired during the reporting period by former World Bank Vice President Jim Adams. The Department of Finance attends as an observer.

The Ethics Committee oversees the department’s conduct and ethics policies and promotes high standards of probity, professionalism, accountability and conduct.

The Workplace Relations Committee comprises employee, union and management representatives and is our principal forum for consulting staff about conditions and exchanging views on workplace issues.

The Indigenous Taskforce provides advice and guidance on Indigenous issues across the department. It is a forum for the Indigenous Employees Network to engage with the senior executive.

designed so our people have a direct line of sight between their daily work and the department’s goals.

Monitor: we monitor progress against the Corporate Plan and Portfolio Budget Statements every quarter. Results are presented to the Performance, Risk and Resourcing Committee.

Review: once a year the department’s executive reviews the performance of each division and state and territory office, and provides a rating against the Corporate Plan and Portfolio Budget Statements performance measures. The Performance, Risk and Resourcing Committee endorses results. The executive reviews the performance of posts on a rolling basis throughout the year.

Learn: the department provides feedback to divisions on their performance. Business plans are living documents and we encourage teams to update these to reflect feedback and increased capacity to measure their performance.

Planning and performance reporting for the development program is a strong focus, including Aid Investment Plans, Aid Quality Checks, Aid Program Performance Reports and the annual Performance of Australian Aid report (see p. 77).

We formally assess individual performance once a year, with mid-term feedback after six months. We encourage regular informal performance discussions. We value upwards feedback and collect this broadly, including for managers at the APS 6 level and above.

We provide training and support to staff to manage individual performance, including on complex issues. Our training recognises performance management as a central element of leadership. All staff can access mentoring through a register of volunteer mentors. First-time posted employees in critical positions overseas receive formal mentoring.

Innovation and risk

Innovation, contestability and foresight are central to the department’s efforts to deliver Foreign Policy White Paper commitments. The Secretary launched our second Innovation Strategy 2018-2021: Seizing Opportunities, Solving Challenges, which seeks to embed innovation across all of the department’s work.

Performance

The department is committed to ongoing improvement of our planning and performance processes as part of our accountability to ministers, parliament and the Australian people. We assess both our service delivery to Australians and our policy outcomes. Measuring our impact in a fluid global operating environment can be difficult and we use a number of methods to test our success. We make judgements on our performance supported by verifiable evidence.

Our performance framework is as follows:

Plan: the Corporate Plan is the department’s primary planning document and sits alongside the Portfolio Budget Statements. It informs work areas’ business plans. These in turn are reflected in individual performance and development agreements. This cascading system is

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Our innovationXchange is finding ways to achieve better outcomes, and to respond to new policy, program and service delivery challenges. Meanwhile our Strategic Policy, Contestability and Futures Branch allows us to better scan the global horizon, and to think about and plan for the future.

Our success also depends on our ability to engage with risk, capitalise on opportunities and work in new ways. The 2019 Comcover Risk Management Benchmarking Survey found an increase in the department’s maturity across all nine elements of the Commonwealth Risk Management Policy.

The department has identified those critical risks that have a systemic impact on our priorities and capacity. We are addressing four enterprise vulnerabilities:

• Changing dynamics of the international system —protecting and promoting regional and global relationships, institutions and norms.

• Tension between Australia’s international and domestic priorities—responding to convergence of international and domestic elements of Australia’s policy objectives.

• Capacity to move resources to emerging priorities—rebalancing resources to meet emerging threats and opportunities while maintaining existing functions.

• Meeting our obligations—assuring we can meet performance, compliance and regulatory expectations.

Our governance committees provide essential oversight of our key risks. The Performance, Risk and Resourcing Committee reviews critical risks once a quarter and directs the department’s response. The Operations Committee reviews operational risks once a quarter. The Audit and Risk Committee gives independent assurance to the Secretary and advises whether the department’s approach is appropriate and fit for purpose.

We give staff the tools to support a positive risk culture. In December we released a Risk Management Guide—our framework for managing risk in line with the expectations of the Commonwealth Risk Management Policy. We have integrated risk management training into other departmental courses. In 2018-19 we ran our first annual survey to assess the department’s innovation and risk culture. The results give us a good

benchmark and show us where to focus our outreach and training.

Our success in building a positive risk culture is not linear. The 2019 APS Employee Census highlighted some areas for improvement, which we are addressing. On balance we believe we are heading in the right direction, but we must not let up on our efforts.

Countering fraud

In 2018-19 the department continued to maintain appropriate fraud prevention, detection, investigation, reporting and data collection procedures. Our Fraud Control Framework ensured the department had robust systems and procedures in place to protect public money, systems, information and property from fraud and corruption.

In September we released a new Fraud Control Plan setting out how we manage fraud and corruption risks, in accordance with the Commonwealth Fraud Control Framework 2017. The plan provides policies, tools and guidance on how to prevent, detect and respond to fraud and corruption risks. We enhanced staff’s fraud awareness through mandatory training, reporting cases and information bulletins. Our Fraud Control Toolkit helps staff comply with their obligations.

Our partner organisations which receive funding play a key role in minimising exposure of the department’s interests to fraud and corruption. We produced a separate Fraud Control Toolkit for funding recipients which articulates the department’s requirements and expectations around managing and delivering programs on our behalf.

Business continuity planning

The department continued to refine its business continuity planning to ensure essential business services are available during and after a major disruption. We prioritised consular and passport services to ensure ongoing support to the Australian public. We tested our business continuity arrangements in June, which showed that we need to improve how we communicate with staff and stakeholders during an event. We are integrating business continuity into our governance arrangements to ensure senior oversight.

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Ambassador to Peru Diana Nelson with two female motorised police —on her way to presenting her credentials in Lima, January 2019 [DFAT]

Our people To achieve our goals, we need the right people, with the right skills, in the right place and at the right time.

A global workforce

The department operates in 109 locations overseas, with an additional 11 posts managed by Austrade. We also have offices in every Australian state and territory capital and the Torres Strait. At 30 June, 2,942 APS staff worked in Australia and 860 APS employees served at our overseas posts (see appendix 1, p. 212).

The department’s Enterprise Agreement sets out the terms and conditions for non-SES APS employees. The current agreement came into effect on 10 January, with a nominal expiry date of 10 January 2022.

Senior Executive Service (SES) staff are employed under the terms of a determination made by the Secretary under

section 24(1) of the Public Service Act 1999 . Key management personnel, SES and other highly paid staff remuneration is set out in Note 6.2 of the financial statements (see p. 182) and in appendix 2.

The department provides a range of non-salary benefits, including influenza vaccinations, on-site gym facilities in Canberra and some overseas missions, and prioritised access to childcare in Canberra.

At 30 June we employed 2,276 locally engaged staff in our overseas missions. They provide invaluable expertise for consular and passport matters, policy development and support, and corporate support. Our locally engaged staff are employed under section 74 of the Public Service Act 1999. Where possible they are employed under individual employment contracts, operating under common terms and conditions in each country. These terms and conditions are standardised across all our posts, with scope for changes where required under local labour law.

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Management and accountability

Workforce strategy

In 2018-19 we continued to roll out our Workforce Strategy 2018-2022 to establish a contemporary human resources business model to meet current and future workforce requirements. Realising the full benefits of the strategy will take time.

We ran recruitment rounds targeting specific capabilities to respond to our priorities. We recruited staff with Pacific expertise to deliver the Pacific Step-up. Other targeted recruitment bolstered the

department’s capability in ICT, security, payroll and specialised passport skills. Building our international development and aid management capability remains a high priority.

In 2018-19 we streamlined some of our processes, leveraged technology and deepened our human resource capability. However there is more work to be done. Our model must be sufficiently agile to provide the department with the workforce it needs to deliver for government. This will continue to be a focus in 2019-20.

Diplomatic Academy The department’s Diplomatic Academy builds skills and capabilities in the department and across the APS to support Australia’s ambitious international engagement agenda.

Since its launch the Diplomatic Academy has offered over 200 face-to-face courses. More than 8,800 staff from our department and other government agencies have participated in over 1,000 classes and seminars. The academy has delivered bespoke training on international policy and diplomatic tradecraft to a variety of APS agencies. It has also provided 166 e-learning courses to nearly 15,000 participants.

A significant new addition to our curriculums was face-to-face training on Indigenous Australia, which was delivered with the Department of the Prime Minister and Cabinet, Australian Institute of Aboriginal and Torres Strait Islander Studies, and Indigenous facilitators.

Our language faculty oversees training and maintenance of language skills, which

are a core capability for the department. At 30 June, 760 serving staff had current proficiency across 31 languages. In 2018-19, 187 officers studied 26 languages in preparation for their postings to language-designated positions at our overseas missions.

The Academy’s International Graduate Program brings together graduate trainees with junior diplomats from around the world, building academic and practical capability as well as enduring relationships. In 2018-19, 42 graduate trainees and 24 international participants engaged in the six-week program, building negotiating, advocacy and business engagement skills, as well as developing a deeper understanding of Australia’s foreign, trade and development policies.

A particular focus was strengthening our international engagement, particularly in the Pacific. We delivered tailored training in Papua New Guinea, Timor-Leste and the northern Pacific.

Staff safety

We operate in high-risk locations and staff welfare is our top priority. We are committed to building an organisational culture that seeks to improve work practices and foster attitudes which sustain healthy and safe work environments. We aim to consider work health and safety in all operational decision-making.

The department’s Performance, Risk and Resourcing Committee, Operations Committee and the Audit and Risk Committee regularly review work health and safety processes and key risks. Page 107 of the Annual Performance Statement sets out our performance in protective security. Reporting on the department’s work health and safety performance is at appendix 5, p. 229.

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Flexible work Mainstreaming flexible work is a key part of our Women in Leadership Strategy and central to enabling women’s career progression. The introduction of an ‘if not, why not?’ approach to flexible work (January 2017), has led to many positive and visible changes. We have a good handle on uptake and attitudes.

In 2018, 31 per cent of colleagues (excluding overseas posts) had some type of flexible work arrangement, consistent with numbers in 2017. The majority of these were women (74 per cent), despite efforts to normalise flexible work for all staff,

including through our Faces of Flexibility intranet campaign, regardless of gender and caring responsibilities.

The proportion of female staff undertaking flexible work (39 per cent) was nearly twice as high as the proportion of male staff (20 per cent)—an increase of six percentage points for women and a decrease of six percentage points for men from 2017.

Work to encourage more men to work flexibly and to equip colleagues with the tools and mindsets to enable effective flexible working continues.

Our culture To deliver for Australia our workforce must be confident and able to contribute to its full potential. As the face of Australia to the world, our staff must also represent the wide and talented diversity of the Australian people.

Our commitment to diversity and inclusion is underpinned by a series of strategies. Beyond that, we encourage behaviour change, accountability and leadership at all levels. We aim to provide a safe workplace, with zero tolerance for discrimination or harassment.

Women in leadership

Our 2015 Women in Leadership Strategy has been a catalyst for visible and positive changes in the department’s culture. In 2019 an independent external review confirmed our substantial progress in ensuring gender equality in the workplace, while showing us where more work needs to be done. The 2019 APS Employee Census results confirm steady progress in employee perceptions of gender equality in the department.

The number of women in senior roles has reached an all-time high. We achieved our end-2018 target of 40 per cent representation of women at the SES Band 1 level, but fell short of our SES Band 2 target of 35 per cent (reaching 32 per cent). Since 2015 the number of

women in the SES has increased from 34 per cent to 40 per cent, and the number of career-appointed women heads of mission (HOM) and heads of post (HOP) has increased from 25 per cent to 40 per cent. We have also made gains in pockets of our department that were traditionally male-dominated. For the first time, women make up 40 per cent of SES in our Information Management and Technology Division.

We have developed tools and policies to support staff, such as our APS-first travel and breastfeeding policy. While progress on women in leadership has been strong, we still have some way to go, especially as a global employer with staff operating in a range of overseas environments.

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Management and accountability

Indigenous employees

We are improving employment outcomes for Aboriginal and Torres Strait Islander Peoples by implementing our Indigenous Recruitment and Career Development Strategy 2016-2020. In 2018-19, 2.7 per cent of our APS employees identified as Aboriginal and/or Torres Strait Islander, with 105 Indigenous APS employees (see appendix 1, p. 216). We applied affirmative measures for Indigenous Australians at the APS 6, EL 1, EL 2 and senior executive levels.

In 2019 the Secretary renewed our commitment to reconciliation by launching the department’s Stretch Reconciliation Action Plan 2019-2022. This plan will help embed reconciliation initiatives across our work so they become business as usual.

A disability-inclusive workplace

We are building the representation of people with disability in our workforce under the department’s Disability Action Strategy 2017-2020.

In 2018-19, 109 of our APS employees reported a disability (2.9 per cent). This differed from the 2018 APS Employee Census, where five per cent of respondees identified as having a disability. We applied affirmative disability measures as part of our bulk recruitment for positions at the APS 6, EL 1, EL 2 and senior executive levels, and applied the RecruitAbility scheme in all other recruitment processes.

To promote a more inclusive workplace we provided disability confidence training to staff, managers and recruitment panels. In August we held our inaugural Disability Awareness Week and launched a dedicated disability portal for staff requiring reasonable adjustments. Disability reporting details under the National Disability Strategy 2010-2020 are available at www.dss.gov.au.

0%

Female staff

10% 20% 30% 40% 50% 60% 70%

October 2015 June 2019

6%

2%

Figure 21 Women in leadership

Total staff

SES

Career-appointed HOM/HOP

57%

59%

34%

40%

25%

40%

0%

Female staff

10% 20% 30% 40% 50% 60% 70%

October 2015 June 2019

0%

Female staff

10% 20% 30% 40% 50% 60% 70%

October 2015 June 2019

15%

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Cultural and linguistic diversity

In June 694 APS employees reported being from a culturally and linguistically diverse background, representing 18.2 per cent of our APS employees. According to the 2018 APS Employee Census, 44 per cent of staff who responded were born overseas and 40 per cent speak a language other than English at home.

In September the Secretary launched the department’s inaugural Cultural

and Linguistic Diversity (CALD) Strategy 2018-2021. This provides a framework to enhance diversity in our work and identifies opportunities to address barriers for CALD staff. The CALD staff network—with almost 150 members— increases the social presence and awareness of the department’s diversity and inclusion initiatives. The department is an official supporter of the Australian Human Rights Commission ‘Racism. It stops with me’ campaign.

2014 2018

+34*

Identify as Indigenous

71 105

-2*

Report a disability

111 109

+21*

Culturally and linguistically diverse

673 694

Figure 22 Diversity

* Change over fi ve years (2014-2018)

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Management and accountability

LGBTI workplace inclusion

According to the APS Employee Census, five per cent of our employees identify as lesbian, gay, bisexual, trans, gender diverse and/or intersex (LGBTI). In November the Secretary launched the department’s inaugural LGBTI Strategy 2018-2021. We are fostering a safe and supportive culture where LGBTI employees feel respected, valued and empowered. The department was acknowledged with a Bronze Tier Award in the Australian Workplace Equality Index. In 2018-19 we also participated in a range of initiatives to improve LGBTI workplace inclusion, including Wear it Purple Day. We celebrated International Day Against Homophobia, Biphobia, Intersexism and Transphobia in Australia and at posts around the world.

Values, conduct and ethics

We ensure the highest standards of conduct, integrity and professionalism. In 2018-19 we promoted the APS Values and Employment Principles through e-learning, face-to-face training and pre-posting conduct and ethics briefings.

Our Employee Conduct and Ethics Section provides an ethical advisory service and

investigates allegations of fraud and misconduct involving staff, including locally engaged staff overseas. During the year, 66 allegations of misconduct were reported—37 were substantiated and 17 were unsubstantiated. Twelve matters are being finalised. Of the 37 substantiated matters, penalties were applied, including fines, a reduction in classification, a reprimand or a salary reduction. We undertook 10 APS Code of Conduct investigations and three employees were dismissed as a result.

Consistent with the Public Interest Disclosure Act 2013, the department helps staff to report wrongdoing in the APS. Our policy is available on our intranet and external website. We also provide e-learning for staff.

Anti-bullying, harassment and discrimination

The department has zero tolerance for bullying, harassment (including sexual harassment) and discrimination, and is committed to providing a workplace that is fair, flexible, safe and rewarding. We provide mandatory e-learning to all staff in Australia and overseas, as well as access to support options, including a global network of over 200 workplace diversity contact

Staff from the Australian Consulate-General New York—including Katie Marini, Jack Pead and Paul Boschen—in the New York Pride March [DFAT]

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officers. The Secretary and heads of 29 agencies represented at overseas posts signed the ‘One Government, One Approach, Zero Tolerance’ statement of commitment.

We published an updated policy that includes additional information on sexual harassment, exploitation and abuse. The policy sets out clear expectations of the standard of behaviour expected of our

employees and contracted partners, as well as obligations for reporting when these expectations are not met. We set up a single telephone number for reporting or seeking assistance on any inappropriate behaviour, sexual harassment or sexual exploitation, and abuse of children and vulnerable adults. Our external website provides easy and quick access to information and support.

Prevention of sexual exploitation, abuse and harassment In April the Secretary released the department’s Preventing Sexual Exploitation, Abuse and Harassment Policy.

It reinforces the department’s zero tolerance of sexual exploitation, abuse or harassment of any kind. This applies within our own organisation but also extends to our partners.

We all have a responsibility to act in an ethical and transparent way to build a respectful working culture that rejects

inappropriate behaviour, and where staff and communities feel supported and valued. For this reason the policy applies to all the department’s business, in Australia and overseas.

The policy requires a heightened commitment and new ways of doing business. We have an opportunity to provide leadership by choosing to partner with— and fund—only those organisations which are prepared to meet the standards we set.

Domestic and family violence

Family and domestic violence is unacceptable under any circumstances. To support staff who are experiencing the impact of such violence, we included a new provision in our Enterprise Agreement that sets out the support we provide to employees experiencing family and domestic violence. This also includes guidance for managers and employees on accessing leave.

Mental health and wellbeing

Our Staff and Family Support Office (SFO) is instrumental to ensuring a mentally healthy and inclusive workplace. In November the Secretary launched the department’s inaugural Mental Health Strategy, after

releasing our Mental Health Policy earlier in 2018. Together these support staff across our global network and create psychologically safe work environments.

During the year staff and families accessed:

• 2,351 individual sessions supporting over 1,050 staff and family members

• 202 training courses on topics such as workplace mental health for managers, stress management and self-care, and working with objectionable materials

• 18 mental health first aid courses

• 209 staff training opportunities.

These initiatives earned the department gold status with Mental Health First Aid Australia as a Mental Health First Aid Skilled Workplace.

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Management and accountability

Modernising our systems The world is changing quickly, and so must we. New technologies and more modern work practices are challenging us to rethink many aspects of the way we operate— including how we organise ourselves, the things we do and how we do them.

The future overseas network

We are increasingly delivering services through regional hubs and flexible operating models through the department’s reDESIGN initiative. The next phase of reDESIGN will mature the regional model, with hubs taking on a more strategic corporate role. Corporate operations will be streamlined within each region, with some common functions transitioned to regional hubs or Canberra.

The department continues to roll out the largest expansion of Australia’s diplomatic network in 40 years. In 2018-19 we opened new posts in Funafuti (Tuvalu), Kolkata (India) and Shenyang (China). In line with our overall aim of achieving better outcomes with finite resources, these posts have smaller footprints and lower operating costs.

Transformation

We are improving our enabling service delivery by streamlining, automating and simplifying systems and processes. Our new Transform22 program will help us modernise many of our corporate enabling services—like human resources, finance and ICT—with less paper and manual data entry, more automation and guided workflows, clearer advice on the intranet, more self-service options, and better data capture and business analytics. Specific improvements include introducing finance and contract management apps to make it easier to procure and pay for services, and implementing a global banking solution to facilitate broader back-office finance centralisation.

We entered into an international banking relationship with Citibank and commenced a project to centralise key elements of banking for our posts in Europe, the Americas, the Middle East and Africa.

We have also improved travel and expense management, enhanced human resource systems, and streamlined recruitment, posting and placements processes.

We are partnering with the Australian Government’s Service Delivery Office’s Productivity and Automation Centre of Excellence (PACE) to automate some processes.

Centralisation of overseas salary payments We leveraged existing technology to centralise and standardise payroll and debt management processes for Australian staff in local currencies across the global diplomatic network. This will reduce about 5,000 hours of administration each year. It will also deliver greater control and

reduce processing errors: we will move from about 30,000 errors corrected in the previous three years to the new process being virtually error-free.

This successful project will be expanded to partner agency staff based overseas.

External accountability Courts and tribunals

We managed a range of legal matters before courts and tribunals in 2018-19.

The department is a defendant in a number of matters before the Federal Court of Australia which commenced during the

year. Two of these relate to passports, one relates to an employment action and one relates to a consular matter.

The department continued to defend applications before the Administrative Appeals Tribunal (AAT) concerning passport decisions. Seven new matters were initiated against the department, and 13 were finalised in 2018-19. At the end of the

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reporting period, there was one active AAT matter and another awaiting final decision.

The department was a defendant in a number of matters in foreign courts or tribunals. Four of these related to employment actions, one of which was settled and three of which were ongoing at the end of the year. The department is a defendant in one matter in a foreign court in relation to an alleged breach of contract.

We complied with discovery, subpoena and other document production obligations in a range of matters. This included those brought against the Commonwealth and other Australian Government agencies.

The department facilitated the service of documents through diplomatic channels relating to private litigation brought overseas and in Australia. We also facilitated the service of documents on foreign states under the Foreign States Immunities Act 1985.

One unfair dismissal claim before the Fair Work Commission was commenced in 2018-19 and discontinued by the claimant.

Freedom of information and privacy

The department finalised 183 freedom of information applications in 2018-19. Detailed information on managing these requests can be found on the Office of the Australian Information Commissioner’s website at oaic.gov.au/ freedom-of-information/foi-resources/ foi-reports.

In line with requirements under the Freedom of Information Act 1982, we continued to publish information under the Information Publication Scheme contained in Part II of the Act. The content is available at dfat.gov.au/foi/ips.html.

The Information Commissioner received one privacy complaint about the department. Following the department’s response to the Information Commissioner’s preliminary inquiries, the Information Commissioner formed the view that the department did not interfere with the individual’s privacy and the matter was closed.

Reports by the Auditor-General

The Auditor-General tabled in parliament the following reports by the Australian National Audit Office (ANAO) related to the department’s operations:

• Report No. 16 of 2018-19: Implementation of the Australian Government’s Workplace Bargaining Framework

• Report No. 17 of 2018-19: Implementation of the Annual Performance Statements Requirements 2017-18

• Report No. 33 of 2018-19: Governance and Integrity of the Northern Australia Infrastructure Facility

• Report No. 41 of 2018-19: Coordination Arrangements of Australian Government Entities Operating in Torres Strait

Details of these reports, including our response, are available on the ANAO website.

Parliamentary committees of inquiry

Information on the department’s engagement with parliamentary committees of inquiry is in appendix 7, p. 233.

Commonwealth Ombudsman

The Commonwealth Ombudsman commenced six investigations in 2018-19 relating to the department’s activities. No notices were provided to the department under subsection 12(4) of the Ombudsman Act 1976 and no formal reports were issued.

Australian Human Rights Commission

The Australian Human Rights Commission initiated one new claim with respect to the department’s activities in 2018-19 and finalised two claims, including one which was initiated in the previous year.

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Management and accountability

Compensation for detriment caused by defective administration, acts of grace, ex-gratia payments

Nineteen new claims were made under the scheme for compensation for detriment caused by defective administration with respect to the department’s activities in 2018-19. The department finalised 22 cases during the same period, including those initiated in the previous financial year. Of these, 14 applications for compensation were accepted and eight were rejected.

One application for an act of grace payment received during a previous financial year was finalised in 2018-19. Another application for an act of grace payment received this year remained in progress with the Department of Finance at the end of the financial year.

Managing our financial resources Assets management

Internal capital funding is allocated based on sound business cases developed by work units, which are assessed rigorously by the central finance area and approved by the senior executive. The senior executive reviews capital investment throughout the year. The long-term strategic planning of the department’s investment needs is supported through the implementation of the Capital Management Plan. We conduct informal reviews and impairment testing of asset classes annually to ensure asset values are fairly stated in the end of year financial statements.

Purchasing

The department’s purchasing was undertaken in accordance with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Commonwealth Procurement Rules. As part of our corporate reform agenda we continued to simplify procurement processes.

Consultants

During 2018-19, 23 new consultancy contracts were entered into involving total actual expenditure of $531,152 (inclusive of GST). In addition, 26 ongoing consultancy contracts were active during the period, involving total actual expenditure of $2,207,713 (inclusive of GST).

The department engaged consultants when required for specialist expertise or independent research, review, assessment or creative solutions to assist decision-making. The decision to engage consultants was made in accordance with the PGPA Act and related rules, including the Commonwealth Procurement Rules and relevant departmental policies.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website at tenders.gov.au.

Table 2 Consultants

Total

No. of new contracts entered into during the period 23

Total actual expenditure during the period on new contracts (inc. GST) $531,152

No. of ongoing contracts engaging consultants that were entered into during a previous period 26

Total actual expenditure during the period on ongoing contracts (inc. GST) $2,207,713

128

DFAT Annual Report 2018-19

Australian National Audit Office access clauses

The department’s standard contract templates include provisions allowing the ANAO to access a contractor’s premises.

Exempt contracts

There were nine contracts in excess of $10,000 (inclusive of GST), with a value of $54,133,164, exempted from being published in AusTender on the basis that publication would disclose exempt matters under the Freedom of Information Act 1982.

Procurement initiatives to support small business

The department supports small business participation in the Commonwealth Government procurement market. Small and medium enterprises (SME) and small enterprise participation statistics are available on the Department of Finance’s website:  finance.gov.au/procurement/statistics-on-commonwealth-purchasingcontracts.

We are committed to ensuring that SMEs can engage in fair competition and demonstrated this through our procurement practices, including use of the Commonwealth contracting templates.

The department held its third aid supplier conference in February to foster

communication and understanding of working with the department to deliver the development program. The conference attracted widespread interest from a diverse aid supplier community.

The department recognises the importance of small businesses being paid on time, and makes sure we do so. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website: treasury.gov.au.

Indigenous business engagement

The department continued to support the Indigenous supplier diversity strategy, including embedding targets in our Reconciliation Action Plan, Indigenous Business Charter and Indigenous People’s Strategy. The department has exceeded its Indigenous contract quota since the inception of the Indigenous Procurement Policy. We received our third consecutive annual Supply Nation finalist nomination for ‘Government Member of the Year’.

The department increased its engagement with Message Stick during the year—a recognised Indigenous-owned business— on a number of projects, including the WebEx video conferencing rollout. By supporting our suppliers we help promote development opportunities and pathways for Indigenous people into roles and careers in the digital economy.

Diversity and inclusion awards The department and its aid suppliers scaled up their work on diversity and inclusion. We received an International Association for Contract and Commercial Management finalist nomination for Delivering Social and Economic Benefit,

and were awarded the Diversity and Inclusion Award by the Chartered Institute of Procurement and Supply Australia. By supporting our suppliers we help promote opportunities and pathways for all in the development program.

Grants

Information on grants awarded by the department during 2018-19 is available at www.grants.gov.au.

129

Management and accountability

Management and accountability

Indigenous women from the Central and Western Deserts performing the story of the Seven Sisters at NAIDOC celebrations at DFAT in Canberra in July 2018. Dancers: Francie Ingkatji, Pantitji Lewis and Alison Carol, singers on stage: Inawinytji Williamson, Rene Kulitja and Yaritji Heffernan [Mark Graham Media]

Financial statements

131

GPO Box 707 CANBERRA ACT 2601 19 National Circuit BARTON ACT Phone (02) 6203 7300 Fax (02) 6203 7777

INDEPENDENT AUDITOR’S REPORT

To the Minister for Foreign Affairs

To the Minister for Trade, Tourism and Investment

In my opinion, the financial statements of the Department of Foreign Affairs and Trade (‘the Entity’) for the year ended 30 June 2019:

(a) comply with Australian Accounting Standards - Reduced Disclosure Requirements and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and

(b) present fairly the financial position of the Entity as at 30 June 2019 and its financial performance and cash flows for the year then ended.

The financial statements of the Entity, which I have audited, comprise the following statements as at 30 June 2019 and for the year then ended:

• Statement by the Secretary and Chief Financial Officer; • Statement of Comprehensive Income; • Statement of Financial Position; • Statement of Changes in Equity; • Cash Flow Statement; • Administered Schedule of Comprehensive Income; • Administered Schedule of Assets and Liabilities; • Administered Reconciliation Schedule; • Administered Cash Flow Statement; and

• Notes to and forming part of the financial statements, comprising significant accounting policies and other explanatory information.

Basis for opinion

I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Entity in accordance with the relevant ethical requirements for financial statement audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) to the extent that they are not in conflict with the Auditor-General Act 1997. I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Independent Auditor’s Report

132

DFAT Annual Report 2018-19

Key audit matters

Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

Key audit matter Accuracy and completeness of international development assistance Refer to Note 2.1A International Development Assistance

The Entity reported international development assistance of $3,205.5 million for the year ended 30 June 2019.

The international development assistance programs are focused on providing assistance to developing countries to reduce poverty and improve living standards.

I considered this to be a key audit matter due to the:

• significant value of the payments made through the Entity’s aid programs; and

• expenses being incurred across a broad range of agreements. These agreements cover a variety of geographical scopes with various counterparties including international organisations, emergency and humanitarian programs and contributions to non-Government organisations and volunteer programs.

How the audit addressed the matter

To address this matter, I performed the following audit procedures:

• assessed and tested, on a sample basis, the design and operating effectiveness of the key controls supporting international development assistance relating to the recording, monitoring and approval of funding agreements and expenditure;

• assessed whether the Entity’s:

o aid management system’s

information technology general controls;

o interface between the aid

management system and financial management information systems; and

o workflow approval process

were designed and operating effectively to support the accurate and complete transfer of data; and

• examined supporting documentation for a sample of payments to assess the accuracy of expenditure amounts including compliance with funding agreements and applicable acquittal processes.

Key audit matter

Valuation of overseas properties

Refer to Note 3.2A Total land and buildings

As at 30 June 2019, the reported fair value of total land and buildings was $3,492.4 million. Overseas properties represents a significant proportion of this balance. The Entity engaged an independent expert to undertake the valuation.

I focused on this area due to the:

• significant value of the properties;

• variety of valuation methodologies applied; and

• inherent subjectivity applied in the

determination of the fair value of the properties.

How the audit addressed the matter

To address this key audit matter I:

• evaluated the competence, capability and objectivity of the Entity’s valuation expert;

• assessed the appropriateness of methodologies used including evaluating the appropriateness of key assumptions applied in the property valuations which included the review of the assessment of movements in the market conditions undertaken by the Entity’s valuation expert; and

• evaluated the relevance, completeness and accuracy of the reports and underlying data used by the Entity’s expert.

133

Financial statements

Independent Auditor’s Report

Key audit matter

Valuation of investments

Refer to Note 4.1C Investments

Non-monetary International Development

Association and Asian Development Fund

subscriptions - fair value through Other

Comprehensive Income

These investments represent subscription-based membership rights held on behalf of the Australian Government in accordance with the articles of association for the International Development Association and the Asian Development Fund.

The Entity engaged an independent expert to undertake the valuation. As at

30 June 2019 the reported fair value of multilateral subscriptions was $2,445.9 million.

I focused on this area due to the:

• significant judgements applied in the valuation, which include timing of future cash flows, currency and interest rate risks and selection of appropriate discount rates; and

• complexity of the membership arrangements, including the withdrawal provisions established by the articles of association for each

subscription that affect the ability of the Entity to redeem its investment.

How the audit addressed the matter

To address this key audit matter I:

• evaluated the competence, capability and objectivity of the Entity’s valuation expert;

• assessed the reasonableness of the methodology and valuation model used including assessment of the appropriateness of key assumptions applied in the model, including comparing key assumptions including discount rates, currency risk premium and risk free rates to publicly available

information; and

• evaluated the relevance, completeness and accuracy of the reports and underlying data used by the Entity’s expert to value the multilateral subscriptions.

Accountable Authority’s responsibility for the financial statements

As the Accountable Authority of the Entity, the Secretary is responsible under the Public Governance, Performance and Accountability Act 2013 (the Act) for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards - Reduced Disclosure Requirements and the rules made under the Act. The Secretary is also responsible for such internal control as the Secretary determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Secretary is responsible for assessing the ability of the Entity to continue as a going concern, taking into account whether the Entity’s operations will cease as a result of an administrative restructure or for any other reason. The Secretary is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the assessment indicates that it is not appropriate.

Auditor’s responsibilities for the audit of the financial statements

My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

134

DFAT Annual Report 2018-19

As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates

and related disclosures made by the Accountable Authority; • conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If I conclude

that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern; and • evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Accountable Authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

From the matters communicated with the Accountable Authority, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Australian National Audit Office

Rahul Tejani

Audit Principal

Delegate of the Auditor-General

Canberra

4 September 2019

135

Independent Auditor’s Report

Financial statements

Statement by the Secretary and the Chief Financial Officer

136

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade STATEMENT OF COMPREHENSIVE INCOME for the period ended 30 June 2019

The above statement should be read in conjunction with the accompanying notes.

Original

2019 2018 Budget

Notes $'000 $'000 $'000

NET COST OF SERVICES

Expenses

Employee benefits 1.1A 853,458 797,532 782,360

Suppliers 1.1B 727,856 694,351 718,166

Depreciation and amortisation 3.2A 195,539 187,155 181,778

Impairment loss allowance on financial instruments 1.1C 9 197 -

Write-down and impairment of other assets 1.1D 5,100 7,923 -

Grants and other contributions 11,197 9,052 -

Finance costs 383 314 -

Other expenses 1.1E 3,903 - -

Total expenses 1,797,445 1,696,524 1,682,304

Own-Source Income

Own-source revenue

Sale of goods and rendering of services 1.2A 147,318 138,918 142,514

Other revenue 1.2B 9,414 6,548 11,258

Total own-source revenue 156,732 145,466 153,772

Gains

Gains from sale of assets 303 132,863 -

Other gains 1.2C 2,543 3,627 674

Foreign exchange gains - non-speculative 5,143 5,546 -

Total gains 7,989 142,036 674

Total own-source income 164,721 287,502 154,446

Net (cost of) services (1,632,724) (1,409,022) (1,527,858)

Revenue from Government - departmental appropriations 1,439,258 1,355,169 1,406,137

(Deficit) from continuing operations (193,466) (53,853) (121,721)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus 220,517 220,427 -

Total other comprehensive income 220,517 220,427 -

Total comprehensive income / (loss) 27,051 166,574 (121,721)

Financial statements

137

Financial statements

Financial statements

Department of Foreign Affairs and Trade STATEMENT OF FINANCIAL POSITION as at 30 June 2019

The above statement should be read in conjunction with the accompanying notes.

Original

2019 2018 Budget

Notes $'000 $'000 $'000

ASSETS

Financial assets

Cash and cash equivalents 3.1A 430,643 405,943 366,424

Trade and other receivables 3.1B 504,542 525,662 559,111

Total financial assets 935,185 931,605 925,535

Non-financial assets

Land 3.2A 1,973,538 1,821,170 1,602,696

Buildings 3.2A 1,518,846 1,513,100 1,536,588

Plant and equipment 3.2A 304,239 280,895 311,868

Intangibles 3.2A 124,714 120,134 124,240

Inventories 3.2B 40,228 46,383 47,118

Assets held for sale 19,618 - -

Other non-financial assets 3.2C 62,218 66,258 61,662

Total non-financial assets 4,043,401 3,847,940 3,684,172

Total assets 4,978,586 4,779,545 4,609,707

LIABILITIES

Payables

Suppliers 3.3A 128,841 108,013 152,738

Other payables 3.3B 59,747 56,305 34,887

Total payables 188,588 164,318 187,625

Provisions

Employee provisions 6.1A 274,081 228,829 217,854

Other provisions 3.4A 25,385 17,810 19,794

Total provisions 299,466 246,639 237,648

Total liabilities 488,054 410,957 425,273

Net assets 4,490,532 4,368,588 4,184,434

EQUITY

Contributed equity 2,720,540 2,618,447 2,730,073

Asset revaluation reserve 1,956,346 1,735,829 1,515,402

(Accumulated deficit) / retained surplus (186,354) 14,312 (61,041)

Total equity 4,490,532 4,368,588 4,184,434

138

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade STATEMENT OF CHANGES IN EQUITY for the period ended 30 June 2019

The above statement should be read in conjunction with the accompanying notes

.

RETAINED EARNINGS

ASSET REVALUATION RESERVE

CONTRIBUTED EQUITY

TOTAL EQUITY

Original

Original

Original

Original

2019

2018

Budget

2019

2018

Budget

2019

2018

Budget

2019

2018

Budget

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Opening balance

Balance carried forward from previous period

14,312

68,165

67,880

1,735,829

1,515,402

1,515,402

2,618,447

2,520,217

2,638,126

4,368,588

4,103,784

4,221,408

Adjusted opening balance

14,312

68,165

67,880

1,735,829

1,515,402

1,515,402

2,618,447

2,520,217

2,638,126

4,368,588

4,103,784

4,221,408

Comprehensive income

Revaluation adjustment

-

-

-

225,846

221,457

-

-

-

-

225,846

221,457

-

Makegood revaluation adjustment

-

-

-

(5,329)

(1,030)

-

-

-

-

(5,329)

(1,030)

-

(Deficit) for the period

(193,466)

(53,853)

(121,721)

-

-

-

-

-

-(193,466)

(53,853)

(121,721)

Total comprehensive income

(193,466)

(53,853)

(121,721)

220,517

220,427

-

-

-

-

27,051

166,574

(121,721)

Transactions with owners

Distribution to owners

Returns on / of capital:

Dividends

(7,200)

-

(7,200)

-

-

-

-

-

-

(7,200)

-

(7,200)

Departmental equity returns

-

-

-

-

-

-

(59,155)

(13,851)

-

(59,155)

(13,851)

-

Contributions by owners

Equity injection - Appropriations

-

-

-

-

-

-

101,121

65,580

22,182

101,121

65,580

22,182

Departmental capital budget

-

-

-

-

-

-

60,127

46,501

69,765

60,127

46,501

69,765

Total transactions with owners

(7,200)

-

(7,200)

-

-

-

102,093

98,230

91,947

94,893

98,230

84,747

Closing balance as at 30 June

(186,354)

14,312

(61,041)

1,956,346

1,735,829

1,515,402

2,720,540

2,618,447

2,730,073

4,490,532

4,368,588

4,184,434

Accounting Policy

Departmental Equity Returns

Equity Injections

Lapsed appropriations are recognised as departmental equity returns. This amount represents prior year

appropriations, which have been repealed in the Appropriation Act (No. 4) 2017-18. Amounts appropriated which are designated as 'equity injections' for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year.

Departmental Capital Budget

2018-19 includes a quarantined amount of $3.016m (2018: $5.829m) relating to no-win / no-loss for Security Funding Agreements.

2018-19 includes $9.638m withheld under section 51.

Dividends

2018-19 includes a transfer of $7.2m from Overseas Property Office special account to the consolidated revenue fund.

Financial statements

139

Financial statements

Financial statements

Department of Foreign Affairs and Trade CASH FLOW STATEMENT for the period ended 30 June 2019

The above statement should be read in conjunction with the accompanying notes.

Original

2019 2018 Budget

Notes $'000 $'000 $'000

OPERATING ACTIVITIES

Cash received

Appropriations 1,595,586 1,586,806 1,398,707

Sale of goods and rendering of services 135,956 135,453 152,808

GST received 37,901 40,598 41,088

Other 8,320 6,407 11,258

Total cash received 1,777,763 1,769,264 1,603,861

Cash used

Employees 825,095 794,026 780,170

Suppliers 723,143 778,804 763,634

Section 74 receipts transferred to OPA 114,931 157,224 -

Other 15,971 9,052 -

Total cash used 1,679,140 1,739,106 1,543,804

Net cash from operating activities 98,623 30,158 60,057

INVESTING ACTIVITIES

Cash received

Proceeds from sales of property, plant and equipment 864 243,292 -

Total cash received 864 243,292 -

Cash used

Purchase of land and buildings 89,868 74,579 125,044

Purchase of plant and equipment 55,498 58,076 35,534

Purchase and development of intangibles 31,491 20,521 14,628

Total cash used 176,857 153,176 175,206

Net cash (used by) / from investing activities (175,993) 90,116 (175,206)

FINANCING ACTIVITIES

Cash received

Contributed equity 104,127 101,720 97,493

Total cash received 104,127 101,720 97,493

Cash used

Dividends paid 7,200 - 7,200

Total cash used 7,200 - 7,200

Net cash from financing activities 96,927 101,720 90,293

Net increase / (decrease) in cash held 19,557 221,994 (24,856)

Cash and cash equivalents at the beginning of the reporting period 405,943 178,403 391,280

Effect of exchange rate movements on cash and cash equivalents at the beginning of the reporting period 5,143 5,546 -

Cash and cash equivalents at the end of the reporting period 3.1A 430,643 405,943 366,424

140

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade ADMINISTERED SCHEDULE OF COMPREHENSIVE INCOME for the period ended 30 June 2019

The above statement should be read in conjunction with the accompanying notes.

Original

2019 2018 Budget

Notes $'000 $'000 $'000

NET COST OF SERVICES

Expenses

International development assistance 2.1A 3,205,464 3,067,706 3,217,811

Multilateral replenishments and other loans 2.1B 254,833 99,664 93,000

Other grants and contributions 2.1C 454,965 418,422 523,422

Export Finance and Insurance Corporation (Efic) 1,365 1,349 1,300

Impairment loss allowance on financial instruments 2.1D 242 728 -

Other expenses 2.1E 10,617 10,048 3,799

Payments to corporate Commonwealth entities - Tourism Australia 135,141 129,308 132,488

Depreciation and amortisation 4.2A 847 985 500

Total expenses 4,063,474 3,728,210 3,972,320

Income

Fees and charges 2.2A 559,992 538,985 607,410

Multilateral replenishments and other loans 2.2B 12,697 401,181 12,697

Efic National Interest Account (NIA) 2.2C 35,513 33,653 30,751

Efic dividend and competitive neutrality 2.2D 15,023 13,122 14,800

Return of prior year administered expenses 2.2E 19,259 56,925 33,478

Other revenue and gains 2.2F 4,605 4,925 255

Total income 647,089 1,048,791 699,391

Net cost of services (3,416,385) (2,679,419) (3,272,929)

OTHER COMPREHENSIVE INCOME

Items not subject to subsequent reclassification to net cost of services

Re-measurements of defined benefit plans (5,309) 6,414 -

Items subject to subsequent reclassification to net cost of services

Re-measurements of multilateral subscriptions 150,987 - -

Movement in the carrying amount of investments 95,127 (6,191) -

Total other comprehensive income 240,805 223 -

Total comprehensive (loss) (3,175,580) (2,679,196) (3,272,929)

141

Financial statements

Financial statements

Department of Foreign Affairs and Trade ADMINISTERED SCHEDULE OF ASSETS AND LIABILITIES as at 30 June 2019

The above statement should be read in conjunction with the accompanying notes.

Original

2019 2018 Budget

Notes $'000 $'000 $'000

ASSETS

Financial assets

Cash and cash equivalents 4.1A 41,796 2,592 12,162

Trade and other receivables 4.1B 190,146 192,342 32,967

Investments 4.1C 3,006,238 2,756,164 2,526,457

Total financial assets 3,238,180 2,951,098 2,571,586

Non-financial assets

Leasehold improvements 4.2A - - 81

Plant and equipment 4.2A - 19 27

Computer software internally developed 4.2A 2,675 3,046 3,512

Prepayments 181 64 128

Total non-financial assets 2,856 3,129 3,748

Total assets administered on behalf of Government 3,241,036 2,954,227 2,575,334

LIABILITIES

Payables

Grants 4.3A 930,179 1,110,323 1,796,954

Other payables 4.3B 631,120 759,933 284,049

Total payables 1,561,299 1,870,256 2,081,003

Provisions

Employee provisions 6.1B 86,943 79,611 82,253

Total provisions 86,943 79,611 82,253

Total liabilities administered on behalf of Government 1,648,242 1,949,867 2,163,256

Net assets 1,592,794 1,004,360 412,078

142

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade ADMINISTERED RECONCILIATION SCHEDULE for the period ended 30 June 2019

The above statement should be read in conjunction with the accompanying notes.

2019 2018

$'000 $'000

Opening assets less liabilities as at 1 July 1,004,360 288,239

Net (cost of) / contribution by services

Income 647,089 1,048,791

Expenses

Payments to entities other than corporate Commonwealth entities (3,928,333) (3,598,902)

Payments to corporate Commonwealth entities - Tourism Australia (135,141) (129,308)

Other comprehensive income

Movement in the carrying amount of investments 95,127 (6,191)

Movement in the carrying amount of multilateral subscriptions 150,987 -

Actuarial (losses) / gains on defined benefit plans (5,309) 6,414

Transfers (to) / from the Australian Government

Appropriation transfers from OPA

Administered assets and liabilities appropriations - 135,933

Annual appropriations

Payments to entities other than corporate Commonwealth entities 4,376,986 3,918,176

Payments to corporate Commonwealth entities - Tourism Australia 135,141 129,308

Special accounts

Payments to entities other than corporate Commonwealth entities 24,677 16,347

Special appropriations (unlimited)

Payments to entities other than corporate Commonwealth entities 1,054 715

Appropriation transfers to OPA

Transfers to OPA (773,844) (805,162)

Closing assets less liabilities as at 30 June 1,592,794 1,004,360

Accounting policy

Administered cash transfers to and from the Official Public Account

Revenue collected by DFAT on behalf of the Government is administered revenue. Collections are transferred to the OPA maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of the Government. These transfers to and from the OPA are adjustments to the administered cash held by DFAT on behalf of the Government and reported as such in the Administered Cash Flow Statement and in the Administered Reconciliation Schedule.

Payments to corporate Commonwealth entities

Payments to corporate Commonwealth entities from amounts appropriated for that purpose are classified as administered expenses, equity injections or loans of the relevant portfolio department. The appropriation to DFAT is disclosed in Note 5.1A: Annual Appropriations (‘Recoverable GST exclusive’).

143

Financial statements

Financial statements

Department of Foreign Affairs and Trade ADMINISTERED CASH FLOW STATEMENT for the period ended 30 June 2019

The above statement should be read in conjunction with the accompanying notes.

2019 2018

Notes $'000 $'000

OPERATING ACTIVITIES

Cash received

Fees and charges 561,832 532,713

GST received 137,915 103,769

Return of prior year administered expenses 19,259 56,925

Efic dividend 6,941 5,791

Efic competitive neutrality 8,082 7,331

Efic - NIA 32,422 30,927

Other 3,431 3,743

Total cash received 769,882 741,199

Cash used

International development assistance 3,755,726 3,356,812

Other contributions 454,965 418,422

Payments to corporate Commonwealth entities - Tourism Australia 135,141 129,308

Other 3,641 3,350

Total cash used 4,349,473 3,907,892

Net cash (used by) operating activities (3,579,591) (3,166,693)

INVESTING ACTIVITIES

Cash received

Proceeds from concessional financial instruments 9,751 9,752

Total cash received 9,751 9,752

Cash used

Purchase of intangibles 457 382

Purchase of concessional financial instruments 154,513 247,564

Total cash used 154,970 247,946

Net cash (used by) investing activities (145,219) (238,194)

Net (decrease) in cash held (3,724,810) (3,404,887)

Cash and cash equivalents at the beginning of the reporting period 2,592 12,162

Cash from Official Public Account

Appropriations 4,513,181 4,184,132

Special accounts 24,677 16,347

Total cash from official public account 4,537,858 4,200,479

Cash to Official Public Account

Appropriations (773,844) (805,162)

Total cash to official public account (773,844) (805,162)

Cash and cash equivalents at the end of the reporting period 4.1A 41,796 2,592

144

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Overview Objectives of the Department of Foreign Affairs and Trade

The Department of Foreign Affairs and Trade (DFAT) is an Australian Government controlled entity. It is a not-for-profit, non-corporate Commonwealth entity. The continued existence of DFAT in its present form and with its present outcomes and programs is dependent on Government policy and on continuing funding by Parliament for DFAT's administration and programs.

DFAT’s role is to advance the interests of Australia and Australians internationally, providing foreign, trade and investment, development and international security policy advice to the Government. DFAT works with other Government agencies to ensure that Australia’s pursuit of its global, regional and bilateral interests is coordinated effectively. DFAT’s role involves working to strengthen Australia’s security, enhancing Australia’s prosperity, delivering an effective and high quality aid programme and helping Australian travellers and Australians overseas. The DFAT Portfolio Budget Statements are structured to meet three outcomes:

 Outcome 1: The advancement of Australia's international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign, trade and international development policy priorities,

 Outcome 2: The protection and welfare of Australians abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services in Australia and overseas, and

 Outcome 3: A secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth's overseas property estate.

DFAT's activities that contribute towards these outcomes are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by DFAT in its own right. Administered activities involve the management or oversight by DFAT, on behalf of the Government, of items controlled or incurred by the Government.

DFAT conducts the following administered activities on behalf of the Government:

 Official development assistance,  Consular and passport services,  Public information services and public diplomacy,  International climate change engagement,  The New Colombo Plan,  Programs to promote Australia’s international tourism interests, and  Payments to international organisations.

Official development assistance administered by DFAT includes international development assistance and multilateral replenishments. Appropriation funding is allocated through country, regional and global programs, and includes payments to international organisations, emergency and humanitarian programs, contributions to non-Government organisations (NGOs) and volunteer programs. The aid program promotes Australia’s national interest by contributing to sustainable economic growth and poverty reduction, particularly in the Indo-Pacific.

Basis of Preparation

The financial statements and notes are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements and notes have been prepared in accordance with:

a) the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR), and

b) Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

Notes to and forming part of the Financial Statements

145

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

The Department has applied the Reduced Disclosure Requirements issued by the AASB with the exception of disclosures prepared under the following accounting standards, as required under subsection 18(3) of the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR):

 AASB 7 Financial Instruments: Disclosure (administered only),  AASB 12 Disclosure of Interests in Other Entities (administered only),  AASB 13 Fair Value Measurement (administered and departmental), and  AASB 116 Property, Plant and Equipment (administered and departmental).

The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified. Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign currency receivables and payables are translated at the exchange rates current at the end of the reporting period. Exchange gains and losses are reported in the Statement of Comprehensive Income. DFAT does not enter into hedging arrangements for its foreign currency transactions and all foreign exchange gains or losses are considered non-speculative in nature.

Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes. Except where otherwise stated below, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Taxation

DFAT is exempt from all forms of Australian taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST). Overseas, DFAT may be subject to Value Added Tax (VAT) or similar on the purchase of goods and services. Revenues, expenses, assets and liabilities are recognised net of GST / VAT except:

a) where the amount of GST or VAT incurred is not recoverable from the Australian Taxation Office or overseas taxation authority, and

b) for receivables and payables.

Events After the Reporting Period

There have been no events after 30 June 2019 which will affect the financial position of DFAT materially at the reporting date.

New Accounting Standards

No accounting standard has been adopted earlier than the application date as stated in the standard. Where transitional provisions apply, all changes in accounting policy are made in accordance with their respective transitional provisions.

All new / revised / amending standards and / or interpretations that were issued prior to the signing of the statement by the Secretary and Chief Financial Officer and are applicable to the current reporting period did not have a material effect on DFAT’s financial statements.

146

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Future Accounting Standards

New accounting standards which will have a future impact on DFAT financial statements are detailed below.

Accounting Standard Effective Date Nature of Change

AASB 16 Leases

1 January 2019, therefore applied from the 2019-20 financial year.

AASB 16 requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligations to make lease payments. Lessor accounting remains substantially unchanged.

DFAT will first apply the accounting standard to leases in the 2019-20 financial reporting period. As outlined by Department of Finance, DFAT will adopt cumulative catch up transitioning application option to the new standard where it does not result in restatement of comparatives.

Likely impact: The adoption of the new standard and related amendments will result in total assets and liabilities increasing by approximately $1.112B, which is primarily due to recognising operating lease assets and liabilities.

The standard also impacts the Statement of Comprehensive Income. Under the existing standard operating lease costs are measured on a straight line basis and disclosed as operating lease minimum payments. The application of new standard results in finance costs and depreciation charges disclosed in the Statement of Comprehensive Income. Under the new standard the same total expenses are recognised over the lease term as the previous standard AASB 17. However, the timing of recognised expenses differs, with greater expenses recorded earlier in the lease term under AASB 16.

There is no change to the cash flow statement other than reclassification of lease payments from operating activities as interest payment portion as operating activities and principal repayment as investing activities.

AASB 1058 Income of Not-for-Profit Entities

AASB 15 Revenue from Contracts with Customers

1 January 2019, therefore applied from the 2019-20 financial year.

More closely recognises not-for-profit income transactions that are not contracts with customers in accordance with their economic reality. The timing of income recognition will depend on whether there is any performance obligation or other liability, which will result in better matching of income and related expenses.

147

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Changes in Accounting policy

Certain comparative amounts have been reclassified or adjusted to conform with current financial reporting guidelines. These are reflected as minor changes in the comparative figures in the statement of comprehensive income and notes 1.1C: Impairment loss allowance on financial instruments, 1.1D: Write-down and impairment of other assets, 3.1B: Trade and other receivables, 3.3A: Suppliers, 6.2: Key management personnel remuneration and 7.3A: Categories of financial instruments.

Administered

Certain comparative amounts have been reclassified or adjusted to conform with current financial reporting guidelines. These are reflected as minor changes in the comparative figures in the administered schedule of assets and liabilities, administered reconciliation schedule, administered cashflow statement, and notes 2.1D: Impairment loss allowance on financial instruments, 2.1E: Other expenses, 4.1A: Cash and cash equivalents, 7.5A: Categories of financial instruments and 7.5D: Fair value of financial instruments.

With the introduction of AASB 9 the multilateral International Development Association (IDA) and Asian Development Fund (ADF) subscription assets have changed classification from non-monetary available for sale debt instruments to non-monetary equity instruments at Fair Value through Other Comprehensive Income (FVOCI). Net valuation changes resulting from foreign exchange variations, discounting and impairment are now reflected in Other Comprehensive Income for 2018-19. There was no change in the recognition of valuation changes for liabilities.

Significant Accounting Judgements and Estimates

In the process of applying the accounting policies detailed in these statements, DFAT has made the following estimates and judgements that have a significant impact on the amounts recorded in the departmental financial statements:

 The fair value of land and buildings has been taken to be the market value of similar properties as determined by an independent valuer. In some instances, DFAT’s buildings are purpose built and may in fact realise more or less in the market.  The fair value of plant and equipment has been taken to be the market value of similar assets or depreciated replacement

value as determined by an independent valuer.  The employee provisions have been determined by reference to advice from the Australian Government Actuary and standard parameters provided by the Department of Finance.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next reporting period.

Administered

In the process of applying the accounting policies detailed in these statements, DFAT has made the following estimates and judgements that have a significant impact on the amounts recorded in the Administered financial statements:

 The fair value of the administered financial instruments in 2018-19 has been determined on a basis consistent with previous years, using professional valuation advice. The fair value of the financial instruments reported in future periods will be affected by variables such as discount rates, exchange rates and possible impairment.

 A number of debts recorded on the Efic National Interest Account (NIA) are impaired, with the impairment assessment based on judgement of the risks to repayment of the debts. For some debts the judgement is discussed and agreed between DFAT and Efic, and is informed by assessment of the economic and political environment and previous repayment history.

 The fair value of DFAT’s defined benefit obligations have been determined on a basis consistent with previous years using professional actuarial calculations that require assumptions about future events. The fair value of the defined benefit schemes reported in future periods will be affected by variables such as discount rates, exchange rates, salary fluctuations and inflation rates.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next reporting period.

148

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Changes in Accounting policy - prior year adjustments

Administered

Consistent with Division 6 section 48(8) of the FRR, DFAT discloses trust balances held within the special account in the footnote to the special account note and has not included trust balances as cash or cash equivalents in the financial statements or in any statement or notes required by AASB 7 Financial Instruments: Disclosures or AASB 9 Financial Instruments. This change in accounting treatment was made to improve accountability, transparency and consistency of the treatment of trust transactions held within special accounts across the Commonwealth in accordance with the FRR.

The impacts of this change on the comparative figures in the financial statements for 2018-19 are as follows:

Comparative

2017-18 Audited ($’000)

Movement ($’000)

2017-18 Restated ($’000)

Schedule of assets and liabilities

Cash and cash equivalents 9,453 (7,866) 1,587

Net impact on:

Reconciliation Schedule

9,453

(7,866)

1,587

Reflects the removal of trust balances held in the special accounts (see Note 4.1B) from the opening balances of assets and liabilities (decrease of $8.646m) and the movement during 2017-18 in the Special account payments to other entities other than corporate Commonwealth entities (increase of $19.415m) and transfer to OPA (increase $20.195m).

Net impact on:

Cash flow statement 9,453 (7,866) 1,587

The net impact of the above is included in the comparative “Cash to Official Public Account - Appropriations” and reflects the exclusion of trust balances held in the special accounts from the opening balances of cash (reduction of $8.646m) and the movement during 2017-18 in cash used (IDA decrease $20.195m) and Cash to OPA (decrease $19.415m in Appropriations).

As part of the transfer of the Asian Development Fund (ADF) into the Asian Development Bank’s (ADB) Consolidated Capital Reserve (OCR) on 1 January 2017 all subscription rights were fixed based on cash contributions paid at the time of transfer. All outstanding pledge payments from this date no longer attract a right to a subscription asset. This change was advised during the preparation of the 2018-19 financial statements. For comparative purposes therefore the outstanding pledge payments of $129.662m have been moved from Other Payables: Multilateral contributions - FV through profit and loss to Grants: Multilateral grants payable - FV through profit and loss to better enable comparison with the 2018-19 numbers.

149

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1. Departmental Financial Performance 1.1 Expenses

2019 2018

$'000 $'000

Note 1.1A: Employee Benefits

Wages and salaries 561,590 547,741

Superannuation

Defined contribution plans 46,161 38,681

Defined benefit plans 42,194 40,634

Leave and other entitlements 74,837 57,788

Fringe benefits expense 118,511 101,049

Separation and redundancies 6,243 8,128

Other employee expenses 3,922 3,511

Total employee benefits 853,458 797,532

Accounting policy

Accounting policies for employee benefits are included in Section 6 People and Relationships.

Note 1.1B: Suppliers

Goods and services supplied or rendered

Passport expenses 125,804 127,966

Property related expenses (excluding rent) 105,921 100,201

Security expenses 80,822 79,642

Information and communication technology 99,406 84,737

Travel expenses 54,227 53,572

Staff related expenses 40,785 37,992

Office expenses 20,926 24,284

Legal and other professional services 12,735 11,362

Contractors 9,855 4,278

Consultants 5,570 5,140

Remuneration of auditors 630 665

Other expenses 17,527 15,915

Total goods and services supplied or rendered 574,208 545,754

Goods supplied 73,346 71,262

Services rendered 500,862 474,492

Total goods and services supplied or rendered 574,208 545,754

Other suppliers

Operating lease rentals 150,217 146,746

Workers compensation expenses 3,431 1,851

Total other suppliers 153,648 148,597

Total suppliers 727,856 694,351

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within 1 year 155,533 138,743

Between 1 to 5 years 357,542 346,732

More than 5 years 302,610 336,566

Total operating lease commitments 815,685 822,041

DFAT operating lease commitments of $815.685m (2018: $822.041m) includes property leases and other minor leases relating to plant and equipment.

DFAT currently has 765 (2018: 782) property related commitments. Property related commitments expected to be paid is $814.591m (2018: $819.772m) which is inclusive of outgoings of $41.045m (2018: $40.624m).

Commitments are GST or VAT inclusive where relevant. GST / VAT included in the total contractual commitments in place for operating leases payable expected to be recovered is $45.231m (2018: $49.525m).

DFAT has in place a number of sub-lease arrangements for the above operating lease commitments. Sub-lease revenue expected to be received is $150.987m (2018: $136.730m) which is inclusive of outgoings of $8.224m (2018: $7.543m).

150

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2019 2018

$'000 $'000

Note 1.1C: Impairment loss allowance on financial instruments

Write-down of financial assets 21 86

Movement in impairment loss allowance (12) 111

Total impairment on financial instruments 9 197

Note 1.1D: Write-down and Impairment of Other Assets

Write-down of leasehold improvements 695 1,541

Write-down of plant and equipment 2,031 5,795

Write-down of intangibles 555 99

Impairment of non-current assets held for sale 1,676 -

Write-down of assets under construction 5 422

Write-off of inventories 138 66

Total write-down and impairment of other assets 5,100 7,923

Accounting policy

Accounting policies for financial assets are included at Note 3.1: Financial Assets. Accounting policies for non-financial assets are included at Note 3.2: Non-Financial Assets.

Note 1.1E: Other Expenses

Act of grace payments 3,903 -

Total other expenses 3,903 -

151

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1.2 Own-source revenue and gains

2019 2018

$'000 $'000

Note 1.2A: Sale of Goods and Rendering of Services

Sale of goods 585 733

Rendering of services 146,733 138,185

Total sale of goods and rendering of services 147,318 138,918

Accounting policy

Revenue from the sale of goods is recognised when:

a) the risks and rewards of ownership have been transferred to the buyer, and

b) DFAT retains no managerial involvement or effective control over the goods.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date, determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction. The revenue is recognised when:

a) the amount of revenue, stage of completion and transaction costs incurred can be reliably measured, and

b) it is probable that the economic benefits of the transaction will flow to DFAT.

Note 1.2B: Other Revenue

Foreign tax refunds 5,767 4,577

Sponsorship revenue 2,644 1,149

Resources received free of charge 630 683

Other revenue 373 139

Total other revenue 9,414 6,548

Accounting policy

Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Sponsorship revenue is recognised as revenue at the fair value of the sponsorship received or receivable when the probable economic benefits of the transaction will flow to DFAT.

Foreign tax refunds are recognised as revenue at the fair value of the foreign tax refund when the probable economic benefits of the transaction will flow to DFAT.

Note 1.2C: Other Gains

Gain on restoration obligation 1,265 3,627

Assets previously expensed 1,278 -

Total other gains 2,543 3,627

Accounting policy

Accounting policies for gain on restoration obligation are included at Note 3.4A: Other Provisions.

Sale of assets Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

152

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2. Income and Expenses Administered on Behalf of Government 2.1 Administered - Expenses

2019 2018

$'000 $'000

Note 2.1A: International Development Assistance

International development assistance 3,205,464 3,067,706

Total international development assistance 3,205,464 3,067,706

Note 2.1B: Multilateral Replenishments and Other Loans

New multilateral replenishments 72,506 22,905

Loss from measuring multilateral financial liabilities - at fair value through profit & loss 137,056 26,505 Unwinding costs - multilateral grants and contributions 45,271 50,254

Total multilateral replenishments and other loans 254,833 99,664

Accounting policy Accounting policies for other loans and multilateral replenishments are included in Note 4.1: Administered - Financial Assets and Note 4.3: Administered - Payables.

Note 2.1C: Other Grants and Contributions

Payments to international organisations 373,118 339,658

New Colombo Plan 49,379 49,826

Tourism Australia - Asia marketing fund 14,000 14,000

Tourism Australia - working holiday makers 5,000 5,000

Other 13,468 9,938

Total other grants and contributions 454,965 418,422

Accounting policy

DFAT administers a number of agreements on behalf of the Australian Government with international organisations. Liabilities are recognised to the extent that: a) the services required to be performed by the recipient have been performed, or b) the eligibility criteria has been satisfied, but payments due have not been made.

Note 2.1D: Impairment Loss Allowance on Financial Instruments

Write-down and impairment of financial assets 242 728

Total impairment loss allowance on financial instruments 242 728

Note 2.1E: Other Expenses

Defined benefit pension schemes 6,691 6,453

Passport fee refunds 811 690

Consular services refunds 8 9

Write-down of non-financial assets - 5

Other foreign exchange losses (non-speculative) 3,107 2,891

Total other expenses 10,617 10,048

153

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2.2 Administered - Income

Administered income relates to ordinary activities performed by DFAT on behalf of the Government. As such, administered appropriations are not revenues of the individual entity that oversees distribution or expenditure of the funds as directed.

2019 2018

$'000 $'000

Note 2.2A: Fees and charges

Passport fees 542,826 522,204

Consular fees 16,302 15,964

Nuclear safeguard charges 864 817

Total fees and charges 559,992 538,985

Accounting policy

Passport and consular income is based on a fee arrangement, collected both domestically and internationally, for the processing of new passport applications, registering lost or stolen passports, issuing emergency passports, and for other travel related documents and notarial endorsements. Fees are determined under the Australian Passports (Application Fees) Act 2005 and the income is recognised on receipt of the fees and all income collected is returned to consolidated revenue. The nuclear safeguard charge income is the Uranium Producers Charge, under the Nuclear Safeguards (Producers of Uranium Ore Concentrates) Act 1993, for each kilogram of uranium ore concentrate produced in Australia with the income recognised on receipt of the charge with all income returned to consolidated revenue.

Note 2.2B: Multilateral Replenishments and Other Loans

Australia-Indonesia Partnership for Reconstruction and Development (AIPRD) loan interest 12,697 12,456 Reversals of impairment on financial instrument - available for sale financial asset - 388,725

Total multilateral replenishments and other loans 12,697 401,181

Accounting policy

Accounting policies for other loans and multilateral replenishments are included in Note 4.1: Administered - Financial Assets and Note 4.3: Administered - Payables.

Note 2.2C: Efic - NIA

NIA premiums 11,823 12,687

NIA repayments of interest subsidies and recoveries 23,690 20,966

Total Efic - NIA 35,513 33,653

Accounting policy

Accounting policies for Efic are included in Note 4.1B: Administered - Financial Assets.

154

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2019 2018

$'000 $'000

Note 2.2D: Efic dividend and competitive neutrality

Efic dividend 6,941 5,791

Competitive neutrality 8,082 7,331

Total Efic dividend and competitive neutrality 15,023 13,122

Accounting policy

Under section 61A of the Export Finance and Insurance Corporation Act 1991 (the Efic Act) the Minister may apply to Efic a debt neutrality charge in respect of short-term insurance contracts entered into by Efic. These arrangements ensure Efic does not, through its Commonwealth ownership, have an unfair advantage over private sector financiers.

Note 2.2E: Return of prior year administered expenses

Return of prior year administered expenses 19,259 56,925

Total return of prior year administered expenses 19,259 56,925

Accounting policy

Return of prior year administered expenses (as recorded in the Administered Schedule of Comprehensive Income) relates to funds returned after finalisation or acquittal of an agreement or funding arrangement which were originally paid from prior year appropriations. These funds are treated as administered revenue in the year the funds are returned and are transferred back to consolidated revenue.

Note 2.2F: Other Revenue and Gains

Defined benefit pension schemes - contributions 4,406 4,250

Other interest 171 664

Other revenue 28 11

Total other revenue and gains 4,605 4,925

Accounting policy

Defined benefit schemes

Accounting policies for the defined benefit schemes - contributions are included in Note 7.6: Administered - Defined Benefit Pension Schemes.

155

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

3. Departmental Financial Position 3.1 Financial Assets

2019 2018

$'000 $'000

Note 3.1A: Cash and Cash Equivalents

Cash on hand or on deposit 92,821 48,618

Overseas property special account cash held by the entity 2,293 3,096

Overseas property special account cash held in the OPA 335,529 354,229

Total cash and cash equivalents 430,643 405,943

Note 3.1B: Trade and Other Receivables

Goods and services receivables

Goods and services 87,073 61,426

Other 6,344 11,084

Total goods and services receivables 93,417 72,510

Appropriations receivables

Departmental - operating 273,818 315,215

Departmental - capital 116,122 118,154

Total appropriations receivable 389,940 433,369

Other receivables

Advances 15,412 14,694

Statutory receivables 4,208 3,964

Cash held by outsiders 159 221

Other 1,505 1,015

Total other receivables 21,284 19,894

Total trade and other receivables (gross) 504,641 525,773

Less impairment loss allowance (99) (111)

Total trade and other receivables (net) 504,542 525,662

Accounting policy

Aside from cash, financial assets are all classified as receivables. Terms for receivables for goods and services are 30 days (2018: 30 days).

156

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 3.1B: Trade and Other Receivables (continued)

Accounting policy

Receivables

Receivables have fixed or determinable payments and are not quoted in an active market. Receivables are initially measured at fair value and subsequently at amortised cost using the effective interest method less impairment.

Receivables that are held for the purpose of collecting the contractual cash flows where the cash flows are solely payments of principal and interest that are not provided at below-market interest rates are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

With the implementation of AASB 9 Financial Instruments for the first time in 2019, the entity classifies its financial assets in the following categories: a) financial assets at fair value through profit or loss; b) financial assets at fair value through other comprehensive income; and c) financial assets measured at amortised cost.

The classification depends on both the entity's business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date.

Comparatives have not been restated on initial application.

Financial Assets at Amortised Cost

Financial assets included in this category need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Appropriations

Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the entity gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

Impairment

For contractual receivables AASB 9 replaces the 'incurred loss' model previously used under AASB 139 with an 'expected credit loss' (ECL) model. This new impairment model applies to financial assets measured at amortised cost, contract assets and debt instruments measured at fair value through other comprehensive income.

Trade and other receivable assets at amortised cost are assessed for impairment at the end of each reporting period. The simplified approach has been adopted in measuring the impairment loss allowance at an amount equal to lifetime ECL.

157

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

3.2 Non-Financial Assets Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles Reconciliation of the opening and closing balances for 2019

Land

Buildings

Plant and equipment

Computer software

1

Total

$'000

$'000

$'000

$'000

$'000

As at 1 July 2018

Gross book value

1,821,170

1,638,843

334,015

218,703

4,012,731

Accumulated depreciation, amortisation and impairment

-

(125,743)

(53,120)

(98,569)

(277,432)

Total as at 1 July 2018

1,821,170

1,513,100

280,895

120,134

3,735,299

Additions:

Purchase

5,682

86,912

55,498

8,113

156,205

Internally developed

-

-

-

23,378 23,378

Other

-

-

1,278

- 1,278

Revaluations and impairments recognised in other comprehensive income

167,664

45,902

12,280

- 225,846

Assets held for sale

2

(20,806)

(488)

-

-

(21,294)

Depreciation and amortisation expense

-

(106,460)

(61,301)

(27,778)

(195,539)

Other movements

Asset reclassification

-

(19,425)

18,003

1,422

-

Disposals

(172)

(695)

(2,414)

(555)

(3,836)

Total as at 30 June 2019

1,973,538

1,518,846

304,239

124,714

3,921,337

Net book value as of 30 June 2019 represented by:

Gross book value

1,973,538

1,666,641

342,898

233,899

4,216,976

Accumulated depreciation, amortisation and impairment

-

(147,795)

(38,659)

(109,185)

(295,639)

Total

1,973,538

1,518,846

304,239

124,714

3,921,337

1. The carrying amount of computer software included $14.756m purchased software and $109.958m

internally generated software.

2. The assets held for sale relates to the staff residence in Manila. The land and building for this property were revalued prior to classification as held for sale with losses due to estimated disposal costs of $1.676m included in Note 1.1D: Write-down and impairment of other assets. The property is expected to be disposed via orderly market transactions within the forward estimates period.

No indicators of impairment were identified for property, plant and equipment, and intangibles.

No land and building assets are expected to be sold within the next 12 months, other than those identified as Assets held for sale in the Statement of Financial Position.

158

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Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles (continued) Revaluations of non-financial assets All revaluations were conducted in accordance with the revaluation policy stated at Note 7.2: Fair Value Measurements. Land and buildings managed by the Overseas Property Office were independently valued by Colliers International Valuation and Advisory Services (CIVAS) as at 30 June 2019. In accordance with DFAT’s 3-year revaluation plan, vehicles, furniture and fittings, office equipment, security equipment and other plant and equipment assets were independently re-valued as at 30 June 2019 by Jones Lang Lasalle (JLL).

There is a revaluation increment of $167.664m for land (2018: increment of $158.737m), an increment of $45.902m for buildings (2018: increment of $70.025m) and an increment of $12.280m for plant and equipment (2018: decrement of $7.305m for ICT assets) which were recorded in the asset revaluation surplus.

Contractual Commitments for the Acquisition of Property, Plant, Equipment and Intangible Assets

DFAT has a number of contractual commitments in place for the purchase and / or development of buildings, leasehold improvements and intangible assets, aged as follows:

2019 ($’000)

2018 ($’000)

Within 1 year 39,759 44,887 Between 1 to 5 years 10,803 4,559

More than 5 years - -

Total commitments 50,562 49,446

The majority of these commitments relate to contracts in place for the development, refurbishment and upgrade of properties in DFAT’s diplomatic network, and are managed through the Overseas Property Office.

Commitments are GST / VAT inclusive where relevant. Total GST / VAT included in the total contractual commitments for the purchase and / or development of buildings, leasehold improvements and intangible assets in 2019: $1.375m (2018: $0.182m).

159

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles (continued)

Reconciliation of the opening and closing balances for 2018

Land

Buildings

Plant and equipment

Computer

software

1

Total

$’000

$’000

$’000

$’000

$’000

As at 1 July 2017

Gross book value

1,662,056

1,545,056

393,871

197,424

3,798,407

Accumulated depreciation, amortisation and impairment

-

(74,292)

(87,581)

(78,529)

(240,402)

Net book value 1 July 2017

1,662,056

1,470,764

306,290

118,895

3,558,005

Additions:

Purchase

2,327

72,780

58,076

2,791

135,974

Internally developed

-

-

-

17,730

17,730

Revaluations and impairments recognised in other comprehensive income

158,737

70,025

(7,305)

-

221,457

Depreciation and amortisation expense

-

(95,583)

(64,806)

(26,766)

(187,155)

Other movements

Asset transfers

-

(2,873)

(4,710)

7,583

-

Disposals

(1,950)

(2,013)

(6,650)

(99)

(10,712)

Net book value 30 June 2018

1,821,170

1,513,100

280,895

120,134

3,735,299

Net book value as of 30 June 2018 represented by:

Gross book value

1,821,170

1,638,843

334,015

218,703

4,012,731

Accumulated depreciation, amortisation and impairment

-

(125,743)

(53,120)

(98,569)

(277,432)

Total

1,821,170

1,513,100

280,895

120,134

3,735,299

1. The carrying amount of computer software included $20.539m purchased software and $99.595m

internally generated software.

No indicators of impairment were identified for property, plant and equipment and intangibles.

160

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Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles (continued)

Accounting policy

Non-financial assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken.

Non-financial assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor's accounts immediately prior to the restructuring.

Asset Recognition Threshold

Purchases of property, plant and equipment are recognised initially at cost in the Statement of Financial Position, except for purchases costing less than $5,000 (2018: $5,000), which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to 'make good' provisions in property leases taken up by DFAT where there exists an obligation to restore the property to its original condition on termination of the lease. These costs are included in the value of DFAT's leasehold improvements with a corresponding provision for the 'make good' disclosed in Note 3.4A: Other Provisions.

Depreciation

Depreciable property, plant and equipment assets are written-down to their estimated residual values over their estimated useful lives to DFAT using, in all cases, the straight-line method of depreciation. Depreciation and amortisation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following typical useful lives:

Asset Class 2019 2018

Buildings Based on remaining useful life Based on remaining useful life

Leasehold Improvements Lesser of lease term or up to 15 years Lesser of lease term or up to 15 years

Plant and Equipment (other than Works of Art) 3 to 25 years 3 to 25 years

Plant and Equipment (Works of Art) 100 years 100 years

Revaluations

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure the carrying amount of assets did not differ materially from the assets' fair value as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation surplus except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus / deficit. Revaluation decrements for a class of assets are recognised directly in the surplus / deficit except to the extent that they reversed a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the re-valued amount. Assets held overseas are valued in local currencies and translated into Australian dollars at the exchange rates current at revaluation date.

De-recognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

161

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles (continued)

Impairment

All assets were assessed for impairment at 30 June 2019. Where indications of impairment existed, the asset's recoverable amount was estimated and an impairment adjustment made if the asset's recoverable amount was less than its carrying amount.

The recoverable amount of any asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset's ability to generate future cash flows, and the asset would be replaced if DFAT were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Intangibles

DFAT's intangibles comprise purchased and internally developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful life of DFAT’s software is 5 to 10 years (2018: 5 to 10 years).

All software assets were assessed for indications of impairment as at 30 June 2019.

Assets held for sale

Non-current assets are classified as held for sale if the carrying amount is to be recovered principally through a sale transaction rather than through continuing use. On classification as held for sale, the asset is measured at the lower of its carrying amount and fair value less costs to sell. Any write down to fair value less costs to sell is recognised as an impairment loss. Assets which have been classified as held for sale are no longer subject to depreciation or amortisation.

Accounting Judgements and Estimates

Restrictions on Title

Due to the diplomatic nature of the overseas property portfolio, some properties have restrictions on title. Restrictions on title vary depending on local Government rules and regulations, such as long term title that prohibits the Commonwealth of Australia from profiting from sale of land. Whilst the effect of restrictions on some titles can be quantified, there are others that cannot, such as those titles held in limited or unsophisticated markets. As part of the valuation process, consideration is given to the restrictions on title.

Assets Under Construction

Assets under construction (AUC) are recorded at acquisition cost. They include expenditure to date on various capital projects carried as AUC. AUC projects are reviewed annually for indicators of impairment and all tangible AUC older than 12 months prior to the reporting date are externally revalued to fair value. Intangible AUC is reviewed through an internal monthly process. Prior to rollout into service, the accumulated AUC balance is reviewed to ensure accurate capitalisation of built or purchased assets.

162

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Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2019 2018

$'000 $'000

Note 3.2B: Inventories

Inventories held for sale

Finished goods 40,228 46,383

Total inventories 40,228 46,383

During 2019, $48.415m of inventory held for sale was recognised as an expense (2018: $46.104m) and $0.138m of inventory was written off (2018: $0.066m).

Accounting policy

Inventories held for sale are valued at cost. Costs incurred in bringing each item of inventory to its present location and condition include the cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.

Note 3.2C: Other Non-Financial Assets

Property prepayments 27,255 28,381

Other prepayments 34,963 37,877

Total other non-financial assets 62,218 66,258

No indicators of impairment were identified for other non-financial assets (2018: nil).

163

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

3.3 Payables

2019 2018

$'000 $'000

Note 3.3A: Suppliers

Trade creditors and accruals 97,346 74,935

Operating lease rentals 26,339 23,246

Other 5,156 9,832

Total suppliers 128,841 108,013

Settlement terms for trade creditors were within 30 days (2018: 30 days).

Note 3.3B: Other Payables

Wages and salaries 7,896 7,889

Superannuation 6,743 516

Separations and redundancies 151 164

Prepayments received / unearned income 35,401 39,386

Lease incentive 8,897 8,081

Other 659 269

Total other payables 59,747 56,305

Accounting policy

Payables are classified as other financial liabilities and are recognised and measured at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

The liability for wages and salaries and superannuation recognised as at 30 June 2019 represents outstanding amounts and contributions for the final payroll fortnight of the financial year.

Lease incentives, typically in the form of a rent-free period, are also recognised as other payables and amortised over the period of the lease on a straight-line basis.

164

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

3.4 Provisions

2019 2018

$'000 $'000

Note 3.4A: Other Provisions

Provision for restoration obligations 25,385 17,810

Total other provisions 25,385 17,810

Provision for restoration

As at 1 July 2018 17,810 19,567

Additional provisions made 2,726 528

Amounts used (25) (345)

Amounts reversed (1,265) (3,627)

Revaluation of Provision 5,329 1,030

Changes in Foreign Exchange Rates 428 344

Unwinding of discount 382 313

Total as at 30 June 2019 25,385 17,810

DFAT currently has 63 agreements (2018: 65) for the leasing of premises where DFAT has raised a provision to restore the premises to their original condition at the conclusion of the lease. The provision reflects the present value of these obligations.

Accounting policy

For a number of property leases, DFAT has obligations to restore to their original condition or makegood leasehold improvements. These are assessed on a site-by-site basis in line with the relevant clauses of the underlying lease, with fair value calculated based on estimated costs per square metre at the time the makegood obligation falls due, discounted to present value.

DFAT engages an independent expert to assist in the valuation of the estimated costs to makegood. The total provision is reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the adjustment relates to the revaluation of the provision and there is sufficient related asset revaluation surplus for the associated leasehold improvement assets, the adjustment is recorded against the asset revaluation surplus. All other adjustments are recognised in the Statement of Comprehensive Income.

165

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

4. Assets and Liabilities Administered on Behalf of Government 4.1 Administered - Financial Assets

2019 2018

$'000 $'000

Note 4.1A: Cash and Cash Equivalents

Cash on hand or on deposit 5,012 1,005

Special account cash held by the entity 5 -

Cash in special accounts held in the OPA 36,779 1,587

Total cash and cash equivalents 41,796 2,592

Accounting policy

Cash is recognised at its nominal amount. Cash and cash equivalents includes cash on hand, deposits on hand in bank accounts and special account cash held (excluding trust balances) in the OPA.

Note 4.1B: Trade and Other Receivables Goods and services receivable

Goods and services receivable 29 25

Scholarship debts 1,748 1,559

Total goods and services receivable 1,777 1,584

Advances and loans

Concessional loan receivable - AIPRD 159,088 156,142

Other - travellers emergency loans 1,194 1,293

Total advances and loans 160,282 157,435

Other receivables

Statutory receivables 13,438 15,117

Net position of Efic - NIA 15,120 13,394

Passport fees - 2,852

Other 1,951 4,281

Total other receivables 30,509 35,644

Total trade and other receivables (gross) 192,568 194,663

Less impairment loss allowance

Advances and loans - travellers emergency loans (651) (729)

Other receivables - external parties (1,771) (1,592)

Total impairment loss allowance (2,422) (2,321)

Total trade and other receivables (net) 190,146 192,342

Trade and other receivables (net) are expected to be recovered

No more than 12 months 30,412 39,503

More than 12 months 159,734 152,839

Total trade and other receivables (net) 190,146 192,342

The impairment loss allowance is based on an assessment of debts outstanding and is predominantly aged more than 90 days.

166

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 4.1B: Trade and Other Receivables (continued)

Reconciliation of the impairment loss allowance

Movements in relation to 2019

Advances and loans

Receivables - external parties Total

$'000 $'000 $'000

Opening balance 729 1,592 2,321

Amounts restated through opening retained earnings - - -

Amounts impaired - 182 182

Amounts recovered and reversed (78) (3) (81)

(Decrease) recognised in net surplus - - -

Closing balance 651 1,771 2,422

Movements in relation to 2018

Advances and loans

Receivables - external parties Total

$'000 $'000 $'000

Opening balance 691 1,123 1,814

Amounts impaired 38 469 507

Amounts recovered and reversed - - -

(Decrease) recognised in net surplus - - -

Closing balance 729 1,592 2,321

Accounting policy

Trade and other receivables

Consistent with DFAT’s outcomes, long-term loans are provided to other entities at concessional rates. On payment of the loan funds, differences between the nominal value of the loan subscription and the fair value of the associated assets are recorded in the Schedule of Administered Items as an expense administered on behalf of Government.

Where loans and receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment, de-recognition and amortisation are recognised through profit or loss.

Efic - NIA

Part 5 of the Efic Act provides for the Minister for Trade, Tourism and Investment to give an approval or direction to Efic to undertake any transaction that the Minister considers is in the national interest. Such transactions may relate to a class of business which Efic is not authorised to undertake, or involve terms and conditions Efic would not accept in the normal course of business on its Commercial Account. Efic manages these transactions on the NIA.

For these transactions, the credit risk is borne by the Government and the funding risk is borne by Efic on the Commercial Account. Accordingly, premium or other income arising from these transactions are paid by Efic to the Government. Efic recovers from the Government the costs of administration and any losses incurred in respect of such business. Loans on the NIA are funded from the Efic Commercial Account at fair value. The amount disclosed above reflects the Commonwealth’s exposure on business undertaken on the NIA. It reflects the net amount of: a) Assets in the form of loans to and rescheduled credit insurance debts owing by foreign governments, commitment fees on loans

received by Efic but not yet paid to the Commonwealth and bond premiums receivable from exports; and, b) Liabilities relating to the reimbursement to Efic for debt forgiveness on loans, provisions for unearned income on loan premiums, accrued expenses including Efic administration fees and other creditors.

167

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2019 2018

$'000 $'000

Note 4.1C: Investments

Non-monetary available-for-sale IDA and ADF Subscriptions - fair value - 2,291,000

Non-monetary IDA and ADF Subscriptions - fair value through OCI 2,445,947 -

Efic - Commercial Account 539,300 444,964

Tourism Australia 20,991 20,200

Total other investments 3,006,238 2,756,164

Accounting policy

Administered investments are measured at their fair value through other comprehensive income as at 30 June 2019. Administered investments in subsidiaries, joint ventures and associates are not consolidated because their consolidation is relevant only at the whole-of-Government level. Financial instruments are recognised on a trade date basis.

Non-monetary IDA and ADF Subscriptions

The Australian Government holds these investments long-term for policy reasons, with the issuers being partner foreign governments and multilateral aid organisations including the IDA and the ADF. The investment represents subscription-based membership rights held by the Australian Government in accordance with the articles of association for the IDA and the ADF.

The subscriptions to the IDA and the ADF are classified as equity investments and have been reclassified at fair value through other comprehensive income under AASB 9: Financial Instruments. There is no intention to trade these investments, as there is no observable market value for them. DFAT, based on independent expert valuation advice, values the investment on a discounted cash flow basis. The basis assumes the redemption of the Commonwealth’s pro-rata share of the outstanding loan principal for each fund. The redemption basis is consistent with the withdrawal provisions of the articles of association with the IDA and the ADF.

The discount rate used to equate the future cash flows to a present value reflects the risk adjusted rate of return demanded by a hypothetical investor. The discount rate range uses the “build up method” based on the following components: risk free rate (20 year US Government bond rate), currency risk premium, sovereign risk premium and liquidity risk premium. Changes in fair value are recognised directly in the administered reconciliation schedule. Foreign currency movements and impairment losses and reversals are recorded in the administered schedule of comprehensive income.

Efic - Commercial Account

Efic's principal activity is the provision of competitive finance and insurance services to Australian exporters and Australian companies investing in new projects overseas. The Australian Government guarantees to Efic’s creditors the payment of monies payable by Efic on the Commercial Account (CA). The Minister for Trade, Tourism and Investment has the powers to determine and instruct Efic to pay a dividend in accordance with section 55(1) of the Efic Act. Fair value has been taken to be the Australian Government's proportional interest in the net assets of the entity as at the end of the reporting period.

Tourism Australia

Tourism Australia is the Australian Government agency responsible for attracting international visitors to Australia, both for leisure and business events. DFAT administers Tourism Australia on behalf of the Government for oversight and management purposes and to improve linkages internationally. Funding appropriated to DFAT for Tourism Australia is disclosed as Payments to corporate Commonwealth entities in the Administered Schedule of Comprehensive Income. Fair value has been taken to be the Australian Government's proportional interest in the net assets of the entity as at the end of the reporting period.

168

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Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

4.2 Administered - Non-Financial Assets

Note 4.2A: Reconciliation of the Opening and Closing Balances for Leasehold Improvements, Plant and Equipment and Intangibles

Leasehold improvements Plant and equipment

Computer software internally developed Total

$’000 $’000 $’000 $’000

As at 1 July 2018

Gross book value - 21 12,218 12,239

Accumulated depreciation, amortisation & impairment - (2) (9,172) (9,174)

Net book value 1 July 2018 - 19 3,046 3,065

Additions

By purchase - - - -

Internally developed - - 457 457

Disposals recognised in net cost of services - - - -

Depreciation & amortisation expenses - (19) (828) (847)

Net book value 30 June 2019 - - 2,675 2,675

Net book value as of 30 June 2019 represented by

Gross book value - - 12,675 12,675

Accumulated depreciation, amortisation & impairment - - (10,000) (10,000)

Net book value 30 June 2019 - - 2,675 2,675

Plant and equipment

There were no revaluation increments or decrements for plant and equipment in 2019.

No indicators of impairment were identified for plant and equipment, and intangibles in 2019.

169

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 4.2A: Reconciliation of the Opening and Closing Balances for Leasehold Improvements, Plant and Equipment and Intangibles (continued)

Leasehold improvements

Plant and equipment

Computer software internally developed Total

$’000 $’000 $’000 $’000

As at 1 July 2017

Gross book value 570 29 11,836 12,435

Accumulated depreciation, amortisation & impairment (489) (2) (8,271) (8,762)

Net book value 1 July 2017 81 27 3,565 3,673

Additions

By purchase - - 99 99

Internally developed - - 283 283

Disposals recognised in net cost of services - (5) - (5)

Depreciation & amortisation expenses (81) (3) (901) (985)

Net book value 30 June 2018 - 19 3,046 3,065

Net book value as of 30 June 2018 represented by:

Gross book value - 21 12,218 12,239

Accumulated depreciation, amortisation & impairment - (2) (9,172) (9,174)

Net book value 30 June 2018 - 19 3,046 3,065

Leasehold improvements

There were no revaluation increments or decrements for leasehold improvements in 2018.

Plant and equipment

There were no revaluation increments or decrements for plant and equipment in 2018.

No indicators of impairment were identified for plant and equipment, and intangibles in 2018.

Accounting policy

Accounting policies are included in Note 3.2: Non-Financial Assets.

170

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

4.3 Administered - Payables

2019 2018

$'000 $'000

Note 4.3A: Grants

Multilateral grants payable - fair value through profit and loss 930,179 1,110,323

Total grants 930,179 1,110,323

Note 4.3B: Other Payables

Multilateral contributions - fair value through profit and loss 494,521 572,495

International development assistance 136,599 187,438

Total other payables 631,120 759,933

Accounting policy

Financial liabilities are classified either at fair value through profit or loss, or as other financial liabilities. Financial liabilities are recognised and derecognised upon ‘Trade Date’.

Financial liabilities at fair value through profit or loss include multilateral grants payable and multilateral contributions payable and are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The 10 year Australian government bond rate is used to discount the expected payment schedules of each loan agreement for multilateral grant payables and multilateral contributions with a discounted rate range (comprising a risk free rate (20 year US government bond rate) and currency, sovereign and liquidity risk premiums) also impacting on the fair value through profit and loss for the multilateral contributions payable.

Other financial liabilities include trade creditors and accruals and are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

As part of the transfer of the Asian Development Fund (ADF) into the Asian Development Bank’s (ADB) Consolidated Capital Reserve (OCR) on 1 January 2017 all subscription rights were fixed based on cash contributions paid at the time of transfer. All outstanding pledge payments from this date no longer attract a right to a subscription asset. This change was advised of during the preparation of the 2018-19 financial statements. For comparative purposes therefore the outstanding pledge payments of $129.662m have been moved from Other Payables: Multilateral contributions - FV through profit and loss to Grants: Multilateral grants payable - FV through profit and loss to better enable comparison with the 2018-19 numbers.

171

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

5. Funding 5.1 Appropriations Note 5.1A: Annual Appropriations ('Recoverable GST exclusive')

Annual Appropriations for 2019

Annual

Appropriation

Section 74

PGPA Act

Total

appropriation

Appropriation applied in 2019 (current and

prior years)

Variance

1

$'000

$'000

$'000

$'000

$'000

Departmental

2

Ordinary annual services

1,416,142

114,931

1,531,073

(1,598,742)

(67,669)

Capital budget

3

69,765

-

69,765

(60,127)

9,638

Equity

104,137

-

104,137

(43,998)

60,139

Total departmental

1,590,044

114,931

1,704,975

(1,702,867)

2,108

Administered

Ordinary annual services

Capital budget

3

504

-

504

(43)

461

Administered items

4

3,844,822

-

3,844,822

(4,277,711)

(432,889)

Payments to corporate

Commonwealth entities

135,141

-

135,141

(135,141)

-

Total administered

3,980,467

-

3,980,467

(4,412,895)

(432,428)

1. Variances in appropriation may result from using prior year non-lapsed appropriations to fund operating and capital expenditure incurred in the current financial year, making payments for benefits to be received

in future years and where obligations in the current financial year are not settled by financial year end. 2. In 2018-19, there were adjustments that met the recognition criteria of a formal addition or reduction in revenue, capital budget or in equity but at law the appropriations had not been amended before the end of the reporting period as Departmental appropriations do not lapse at financial year end. The adjustments were: an increase to revenue of $19.831m relating to no-win / no-loss funding for foreign exchange; a

reduction to revenue of $6.686m relating to no-win / no-loss funding for Passport Funding Agreement; an increase to revenue of $17.968m relating to no-win / no-loss funding for FBT payable on living away from home allowance; a reduction to revenue of $7.996m relating to no-win / no-loss for Security Funding Agreements; a reduction in equity of $3.016m relating to no-win/no-loss for Security Funding Agreements; and, a section 51 reduction of $9.638m to Department Capital Budgets relating to 2018/19 Additional Estimates measures. The net increase in appropriation of $23.117m and a net decrease in appropriation of $3.016m will be applied against 2019-20 Appropriation Act (No. 3) and 2018-19 Appropriation Act (No. 2) respectively. 3. Departmental and Administered Capital Budgets are appropriated through Appropriations Acts (No. 1, 3 and 5). They form part of the ordinary annual services, and are not separately identified in the Appropriation Acts. 4. Commonwealth Superannuation Corporation (CSC) spends money from the Consolidated Revenue Fund on behalf of DFAT in accordance with the Papua New Guinea (Staffing Assistance) Act 1973. In 2018-19 CSC drew down $5.142m from DFAT's administered appropriation. The Department of Education (DoE) also makes withdrawals on behalf of DFAT under the New Colombo Plan Agreement. In 2018-19 the DoE drew down $46.190m from DFAT's administered appropriation. These amounts are included in the appropriation applied amount above.

172

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 5.1A: Annual Appropriations ('Recoverable GST exclusive') (continued)

Annual Appropriations for 2018

Annual

Appropriation

1

Section 74

PGPA Act

Total

appropriation

Appropriation applied in 2018 (current and

prior years)

Variance

2

$'000

$'000

$'000

$'000

$'000

Departmental

Ordinary annual services

1,359,553

157,224

1,516,777

(1,594,103)

(77,326)

Capital budget

3

46,501

-

46,501

(47,598)

(1,097)

Other services

Equity

71,408

-

71,408

(54,121)

17,287

Total departmental

1,477,462

157,224

1,634,686

(1,695,822)

(61,136)

Administered

Ordinary annual services

Capital budget

3

443

-

443

(348)

95

Administered items

4,5

3,651,992

-

3,651,992

(3,792,701)

(140,709)

Payments to corporate

Commonwealth entities

129,308

-

129,308

(129,308)

-

Other services

Administered assets and liabilities

150

-

150

(135,933)

(135,783)

Total administered

3,781,893

-

3,781,893

(4,058,290)

(276,397)

1. Variances in appropriation may result from using prior year non-lapsed appropriations to fund operating and capital expenditure incurred in the current financial year, making payments for benefits to be received

in future years and where obligations in the current financial year are not settled by financial year end. 2. In 2017-18, there were adjustments that met the recognition criteria of a formal addition or reduction in revenue or in equity but at law the appropriations had not been amended before the end of the reporting period as Departmental appropriations do not lapse at financial year end. The adjustments were: an increase to revenue of $6.715m relating to no-win / no-loss funding for foreign exchange; an increase

to revenue of $2.441m relating to no-win / no-loss funding for Passport Funding Agreement; a reduction to revenue of $2.406m relating to no-win / no-loss funding for FBT payable on living away from home allowance; a reduction to revenue of $7.675m relating to no-win / no-loss for Security Funding Agreements; a net reduction to revenue of $3.460m relating to savings measures as per 2018-19 PBS and a reduction in equity of $5.829m relating to no-win / no-loss for Security Funding Agreements. The net decrease in appropriations of $4.385m and $5.829m will be applied against 2017-18 Appropriation Act 1 and 2017-18 Appropriation Act 2 respectively. 3. Departmental and Administered Capital Budgets are appropriated through Appropriations Acts (No. 1, 3 and 5). They form part of the ordinary annual services, and are not separately identified in the Appropriation Acts. 4. In 2017-18 a section 51 reduction of $10.772m was applied against Appropriation Act (No. 1) 2017-18 as published in the 2018-19 Portfolio Budget Statements for the following measures: $6.025m relating to Government decisions for the Pacific Labour Scheme and Seasonal Workers Program and $4.747m relating to savings against the International Development Assistance program due to reallocation of funds to a new multilateral replenishment agreement. 5. Commonwealth Superannuation Corporation (CSC) spends money from the Consolidated Revenue Fund (CRF) on behalf of DFAT in accordance with the Papua New Guinea (Staffing Assistance) Act 1973. In 2017-18 CSC drew down $6.084m from DFAT's administered appropriation. The Department of Education (DoE) also expends funds from the CRF on behalf of DFAT under the New Colombo Plan Agreement. In 2017-18 the DoE drew down $48.225m from DFAT's administered appropriation. These amounts are included in the appropriation applied amount above.

173

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 5.1B: Unspent Annual Appropriations ('Recoverable GST exclusive')

2019 2018

$'000 $'000

Departmental

Appropriation Act (No. 2) 2015-161 - 62,885

Appropriation Act (No.1 ) 2016-172 28,170 28,170

Appropriation Act (No.1) 2017-183 4,384 319,599

Appropriation Act (No.2) 2017-184 20,830 64,828

Appropriation Act (No.1 ) 2017-18 - Cash at bank and on hand - 48,618

Appropriation Act (No.1) 2018-19 250,701 -

Appropriation Act (No.1) 2018-19 DCB5 9,638 -

Appropriation Act (No.2) 2018-196 22,182 -

Appropriation Act (No.4) 2018-19 81,955 -

Appropriation Act (No.1) 2018-19 - Cash at bank and on hand 92,821 -

Total departmental 510,681 524,100

1. Appropriation Act (No.2) 2015-16 was repealed on 1 July 2018. 2. Appropriation Act (No.1) 2016-17 includes $28.170m withheld under section 51. 3. Appropriation Act (No.1) 2017-18 includes $4.384m withheld under section 51. 4. Appropriation Act (No.2) 2017-18 includes $5.829m withheld under section 51. 5. Appropriation Act (No.1) 2018-19 DCB includes $9.638m withheld under section 51. 6. Appropriation Act (No.2) 2018-19 includes $3.016m which is quarantined.

DFAT has in place a number of no-win / no-loss funding agreements due to the complex and variable environment the department operates in overseas. The difference between the balance of departmental appropriation receivable disclosed in Note 3.1B: Trade and other receivables and the above balance on unspent annual appropriations is due to these agreements and cash at bank and on hand. Adjustments relating to the no-win / no-loss agreements are recognised as formal additions or reductions in DFAT's accounts.

174

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 5.1B: Unspent Annual Appropriations ('Recoverable GST exclusive') (continued)

2019 2018

$'000 $'000

Administered

Appropriation Act (No. 1) 2015-161 - 64,983

Appropriation Act (No. 1) 2015-16 - ACB1 - 1,817

Supply Act (No. 1) 2016-17 155,860 230,597

Appropriation Act (No. 1) 2016-17 104,775 513,508

Appropriation Act (No. 1) 2016-17 - ACB 89 89

Appropriation Act (No. 2) 2016-17 581,531 581,531

Appropriation Act (No. 3) 2016-17 - 33,440

Appropriation Act (No. 1) 2017-182 151,563 292,215

Appropriation Act (No. 1) 2017-18 - ACB 95 95

Appropriation Act (No. 1) 2017-18 Cash at Bank and on hand - 1,005

Appropriation Act (No. 1) 2018-19 224,200 -

Appropriation Act (No. 1) 2018-19 - ACB 461 -

Appropriation Act (No. 3) 2018-19 472 -

Appropriation Act (No. 1) 2018-19 Cash at Bank and on hand 5,012 -

Total administered 1,224,058 1,719,280

1. Appropriation Acts (No.1) 2015-16 were repealed on 1 July 2018.

2. Appropriation Act (No.1) 2017-18 includes $10.772m withheld under section 51.

175

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 5.1C: Special Appropriations ('Recoverable GST exclusive')

Appropriation applied

2019 2018

Authority Type Purpose $'000 $'000

Export Finance and Insurance Corporation (Efic) Act 1991 s.54(10), Administered

Unlimited Amount

For the payment by the Commonwealth to Efic of amounts equal to the amount of capital determined by the Efic Board as necessary to overcome the inadequacies, in the moneys or other assets of Efic to meet the expected liabilities, losses or claims against Efic

-

-

Public Governance, Performance and Accountability Act 2013 s77, Administered1

Refund To provide an appropriation where an Act or other law requires or permits the repayment of an amount received by the Commonwealth and apart from this section there is no specific appropriation for the repayment

1,054 715

Total special appropriation applied 1,054 715

1. DFAT uses section 77 of the PGPA Act to make refunds of passport and consular fees in certain circumstances, where there is no other specific appropriation available to make the repayment.

176

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

5.2 Special Accounts

Note 5.2A: Special Accounts ('Recoverable GST exclusive')

Overseas Property Special Account1 (Departmental) EXPO 2020 Dubai2 (Administered)

2019 2018 2019 2018

$'000 $'000 $'000 $'000

Balance brought forward from previous period 357,325 103,205 - -

Increases 129,085 390,360 41,756 -

Total increases 129,085 390,360 41,756 -

Available for payments 486,410 493,565 41,756 -

Decreases

Administered - - (6,782) -

Departmental (148,588) (136,240) - -

Total decreases (148,588) (136,240) (6,782) -

Total balance carried to the next period 337,822 357,325 34,974 -

Balance represented by:

Cash held in entity bank accounts 2,293 3,096 5 -

Cash held in the Official Public Account 335,529 354,229 34,969 -

Total balance carried to the next period 337,822 357,325 34,974 -

Services for Other Entities and Trust Moneys - DFAT Special Account3 (Administered)

Consular Services Special Account4 (Administered)

2019 2018 2019 2018

$'000 $'000 $'000 $'000

Balance brought forward from previous period 9,403 11,119 50 40

Increases 18,918 21,134 99 88

Total increases 18,918 21,134 99 88

Available for payments 28,321 32,253 149 128

Decreases

Departmental - - - -

Administered (23,119) (22,850) (102) (78)

Total decreases (23,119) (22,850) (102) (78)

Total balance carried to the next period 5,202 9,403 47 50

Balance represented by:

Cash held in entity bank accounts - - - -

Cash held in the Official Public Account 5,202 9,403 47 50

Total balance carried to the next period 5,202 9,403 47 50

177

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 5.2A: Special Accounts ('Recoverable GST exclusive') (continued)

1. Appropriation: Public Governance, Performance and Accountability Act 2013 section 78 Establishing Instrument: PGPA Act Determination (Establishment of Overseas Property Special Account 2017) Purpose: a) acquire, lease, construct, manage, operate, repair, maintain, divest, finance, identify or advise on, and undertake any other

activities in relation to, the real property of the Commonwealth outside Australia b) repay to an original payer amounts credited to the special account or to the former special account, after any necessary payments made for the purposes mentioned in paragraph (a) c) carry out activities that are incidental to a purpose mentioned in paragraph (a) d) reduce the balance of the Special Account (and, therefore, the available appropriation for the Account) without making a real or

notional payment, including to give effect to the remittance of amounts to the Official Public Account as agreed between the Finance Minister and the responsible minister e) repay amounts where an Act or other law requires or permits the repayment of an amount received.

2. Appropriation: Public Governance, Performance and Accountability Act 2013 section 78 Establishing Instrument: PGPA Act Determination (Expo 2020 Dubai Special Account). Purpose: a) to undertake activities in relation to the Commonwealth’s participation at Expo 2020, including, but not limited to:

i. acquiring, leasing, hiring, constructing, managing, operating, repairing, maintaining, identifying or advising on assets; ii. costs related to staff and contractors to carry out activities listed in clause (a)i above, and; iii. activities that are incidental to those listed in clause (a)i above. b) to disburse an amount in connection with an agreement between the Commonwealth and another government in relation to the

Expo 2020; c) to repay an amount where an Act, other law, or court order requires or permits the repayment of an amount credited to the special account; d) to reduce the balance of the special account (and, therefore, the available appropriation for the special account) without making

a real or notional payment.

3. Appropriation: Public Governance, Performance and Accountability Act 2013 section 78 Establishing Instrument: Financial Management and Accountability (Special Accounts) Determination 2009/25 Purpose: a) disburse amounts held in trust or otherwise for the benefit of a person other than the Commonwealth

b) disburse amounts in connection with services performed on behalf of other governments and bodies that are corporate Commonwealth entities under the PGPA Act c) repay amounts where an Act or other law requires or permits the repayment of an amount received d) reduce the balance of the Special Account (and, therefore, the available appropriation for the Account) without making a real or

notional payment.

The SOETM Special Account includes the balance of funds held in trust for overseas governments via delegated co-operation agreements and for private individuals for amounts being transferred back to Australia in accordance with established policy. These amounts are $3,389,620.88 and $1,983.83 respectively and have, therefore, been excluded from presentation in the Administered Financial Statements.

4. Appropriation: Public Governance, Performance and Accountability Act 2013 section 78 Establishing Instrument: PGPA Act (Consular Services Special Account 2015 - Establishment) Determination 2015/05 Purpose: a) providing assistance to Australian citizens and permanent residents overseas:

i. in circumstances of urgency ii. when commercial money transfer services are unavailable or inappropriate

b) to repay to an original payer amounts credited to the Special Account and residual after any necessary payments have been made under paragraph (a) c) activities that are incidental to a purpose mentioned in paragraphs (a) or (b) d) to reduce the balance of the Special Account (and, therefore, the available appropriation for that Account) without making a real

or notional payment e) to repay amounts where an Act or other law requires or permits the repayment of an amount received.

The entire balance of the Consular Special Account is held in trust and has therefore been excluded from presentation in the Administered Financial Statements.

178

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2019 2018

$'000 $'000

Note 5.2B: Assets Held in Trust

As at 1 July 7,866 8,646

Receipts 14,403 19,415

Payments (18,830) (20,195)

Total as at 30 June 3,439 7,866

Total assets held in trust 3,439 7,866

Accounting policy

All trust funds are held as cash within special accounts in OPA for the benefit of third parties. The SOETM Special Account includes the balance of funds held in trust for overseas governments via delegated co-operation agreements and for private individuals for amounts being transferred back to Australia in accordance with established policy. Consular trust funds are held to provide assistance to Australian citizens and permanent residents overseas in circumstances of urgency, or when commercial money transfer services are unavailable or inappropriate.

179

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

6. People and Relationships 6.1 Employee Provisions

2019 2018

$'000 $'000

Note 6.1A: Employee Provisions

Leave 184,169 163,939

Separations and redundancies 21,687 21,432

Superannuation 16,060 14,713

Other employee provisions 52,165 28,745

Total employee provisions 274,081 228,829

Accounting policy

Liabilities for short-term employee benefits and termination benefits expected within twelve months of the end of reporting period are measured at their nominal amounts. Other long-term employee benefit liabilities are measured as the net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that will be applied at the time the leave is taken, including DFAT’s employer superannuation contribution rates and other employment on-costs, to the extent that the leave is likely to be taken during service rather than paid out on separation.

The liability for long service leave has been determined with reference to the work of an actuary as at 31 January 2017. The estimate of the present value of the liability takes into account attrition rates, pay increases through promotion and inflation. DFAT engages an actuary every three years unless it is assessed that there is a material movement in DFAT’s staff profile.

Separation and Redundancy

In some countries, locally engaged staff employed by DFAT at overseas posts are entitled to separation benefits under local labour laws. DFAT provides for these separation benefits, and they have been classified as an employee benefit.

DFAT recognises a provision for redundancy when a decision by management has been made and affected employees have been informed that DFAT will carry out those terminations of employment.

Superannuation

The Australian-based staff of DFAT are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the Public Sector Superannuation accumulation plan (PSSap), or other superannuation schemes. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap and the other superannuation schemes are defined contribution schemes.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes.

DFAT makes employer contributions to the employee superannuation schemes at rates determined by the Government. For defined benefit scheme employer contribution rates are determined by an actuary to be sufficient to meet the current cost to the Government. DFAT accounts for these as if they were contributions to defined contributions plans.

Where required, DFAT makes superannuation contributions for locally engaged staff overseas to comply with local labour laws. Australian based staff who are engaged on a temporary basis and locally engaged staff overseas who are considered to be Australian residents for taxation purposes have compulsory employer superannuation contributions made on their behalf by DFAT.

180

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2019 2018

$'000 $'000

Note 6.1B: Administered Employee Provisions

Leave 8,977 9,600

Superannuation 353 402

Defined benefit pension schemes 77,613 69,609

Total administered employee provisions 86,943 79,611

Accounting policy

DFAT administers defined benefit pension schemes for some locally engaged staff in Washington, Ottawa, London, Port Louis and New Delhi on behalf of the Australian Government. DFAT recognises an administered liability for the present values of the Government's expected future payments arising from the unfunded components of the Washington, Ottawa, London and Port Louis Pension Schemes and the New Delhi Gratuity Scheme.

Increases in the accrued benefits liability, pursuant to regular estimates of the liability taking account of actuarial reviews, are recognised as an expense and classified as employee superannuation expense. Re-measurement of the net defined benefit obligation is recognised in other comprehensive income as outlined in AASB 119 Employee Benefits. DFAT engages actuaries to estimate the unfunded provisions and expected future cash flows as at the end of the reporting period each year. More details on the defined benefit pension schemes are included in Note 7.6: Administered - Defined Benefit Pension Schemes.

181

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

6.2 Key Management Personnel Remuneration

DFAT’s key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the department. DFAT has determined the key management personnel to be the Portfolio and Assisting Ministers, the Secretary, Deputy Secretaries, Chief People Officer, Chief Risk Officers and Chief Finance Officer. Key management personnel remuneration is reported in the table below:

2019 2018

$'000 $'000

Short-term employee benefits 3,517 3,186

Post-employment benefits 526 460

Other long-term employee benefits 75 67

Total key management personnel remuneration expenses1 4,118 3,713

The total number of key management personnel that are included in the above table are 12 (2018: 15).

1. The above key management personnel remuneration excludes the remuneration and other benefits of the Portfolio Ministers. The Portfolio Ministers remuneration and other benefits are set by the Remuneration Tribunal and are not paid by DFAT.

Chief Risk Officer was included as a key management personnel effective from 1 January 2019 as per DFAT's new governance arrangements.

6.3 Related Party Disclosures

Related party relationships:

DFAT is an Australian Government controlled entity. DFAT’s related parties are key management personnel including the Portfolio and Assisting Ministers, and other Australian Government entities.

Transactions with related parties:

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens.

Transactions with related parties of DFAT have occurred within normal customer or supplier relationships on terms and conditions no more favourable than those which it is reasonable to expect DFAT would have entered into on an arm's-length basis. These transactions have not been separately disclosed in this note.

Giving consideration to relationships with related entities, and transactions entered into during the reporting period by DFAT, it has been determined that there are no related party transactions (2018: nil) to be separately disclosed.

182

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7. Managing Uncertainties 7.1 Contingent Assets and Liabilities Contingent liabilities and contingent assets are not recognised in the Statement of Financial Position but are reported in the notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are reported when settlement is probable but not virtually certain and contingent liabilities are disclosed when the probability of settlement is greater than remote.

Note 7.1A: Contingent Liabilities and Assets

Guarantees

Claims for damages or costs

Total

2019

2018

2019

2018

2019

2018

$'000

$'000

$'000

$'000

$'000

$'000

Contingent liabilities

Balance from previous period

706

700

423

602

1,129

1,302

New contingent liabilities recognised

-

-

1,467

-

1,467

-

Re-measurement

3

6

15

16

18

22

Obligations expired

-

-

-

(195)

-

(195)

Total contingent liabilities

709

706

1,905

423

2,614

1,129

Net contingent (liabilities)

(709)

(706)

(1,905)

(423)

(2,614)

(1,129)

Quantifiable Contingencies

The above table reports contingent liabilities in respect of claims for damages / costs of $1.905m (2018: $0.423m). This amount represents an estimate of DFAT's liability based on precedent cases and on advice from DFAT's external legal service providers. The department is defending the claims.

The above table also reports contingent liabilities in respect of financial guarantees made by the department of $0.709m (2018: $0.706m)

Unquantifiable Contingencies

At 30 June 2019, DFAT was involved in a number of litigation matters for alleged losses suffered by claimants. DFAT is defending these claims. It is not possible to estimate the amounts of any eventual payments that may be required in relation to these claims.

183

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.1B: Administered - Contingent Assets and Liabilities DFAT has no administered contingent assets or liabilities (2018: nil).

Quantifiable Administered Contingencies

There are no quantifiable administered contingencies disclosed in the Administered Schedule of Assets and Liabilities (2018: nil).

Unquantifiable Administered Contingencies

At 30 June 2019, DFAT was involved in a number of matters relating to the recovery of funds. It is not possible to estimate the amounts of any eventual recoveries that may be received in relation to these matters. There are no unquantifiable administered liabilities.

Significant Remote Administered Contingencies

Under section 62 of the Export Finance and Insurance Corporation Act 1991, the Australian Government guarantees Efic’s creditors the due payment of all monies payable, or that may at any time become payable, by Efic on the Commercial Account and has a $1.2B (2018: $0.2B) callable capital facility available for this purpose. This guarantee has never been utilised. Details of remote contingencies are shown in the following table.

2019 2018

$'000 $'000

Contracts of insurance and guarantees 678,500 715,100

Statement of financial position liabilities 2,433,100 2,212,100

NIA contracts of insurance, guarantees and statement of position liabilities 395,600 415,800

Total 3,507,200 3,343,000

184

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7.2 Fair Value Measurements

The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the statement of financial position do not apply the fair value hierarchy.

The different levels of the fair value hierarchy are defined below.

 Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date.

 Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 Level 3: Unobservable inputs for the asset or liability.

Accounting policy

Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not differ materially from the assets' fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets. Land and buildings managed by the Overseas Property Office were independently valued by CIVAS as at 30 June 2019. Plant and equipment were independently valued by JLL as at 30 June 2019.

An annual assessment is undertaken to determine whether the carrying amount of the assets is materially different from their fair value. DFAT engaged JLL to undertake this review, and JLL has provided written assurance that the models developed are in compliance with AASB 13 Fair Value Measurement. DFAT's assets are held for operational purposes and not held for the purposes of deriving a profit. The current use of all non-financial assets is considered their highest and best use. DFAT's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There were no transfers between levels 1 and 2 for recurring fair value measurements during the year.

The methods utilised to determine and substantiate the unobservable inputs are derived and evaluated as follows:

Buildings and Leasehold Improvements - Replacement Cost of New Assets and Contracted Prices

DFAT also controls assets situated in locations where construction cost evidence is limited. In determining the replacement cost for new assets measured using the depreciated replacement cost approach, reference has been made to the available building cost information. The valuer has used significant professional judgement in determining the fair value measurements of these assets.

Leasehold improvements - Physical depreciation and obsolescence

Assets that are not transacted with enough frequency or transparency to develop objective opinions of value from observable market evidence have been measured utilising the Depreciated Replacement Cost approach. Under the Depreciated Replacement Cost approach, the estimated cost to replace the asset is calculated and then adjusted to take into account physical depreciation and obsolescence. Physical depreciation and obsolescence has been determined based on professional judgement regarding physical, economic and external obsolescence factors relevant to the asset under consideration. For all leasehold improvement assets, the consumed economic benefit / asset obsolescence deduction is determined based on the term of the associated lease.

Land and Buildings - Adjusted Market Transactions, Estimated Market Rental Values and Capitalisation Rates

DFAT also controls assets situated in locations where property markets experience relatively few transactions. In determining fair value of these assets, reference has been made to available sales evidence together with other relevant information related to local economic conditions and property market conditions. The valuer has used significant professional judgement in determining the fair value measurements of these assets.

Investment in the Efic Commercial Account and Tourism Australia

DFAT has determined that the reported net asset values represent fair value at the end of the reporting period.

Financial Liabilities at Fair Value Through Profit and Loss

Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Other Financial Liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

185

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.2A: Fair Value Measurements, Valuation Techniques and Inputs Used

Fair value measurements at the end of the reporting period

Valuation Technique(s) and Inputs Used

2019 2018 Category

$'000 $'000 (Level 1, 2 or 3)

Non-financial assets:

Land 1,483,830

1,412,493

2

Market Approach:

This approach seeks to estimate the current value of an asset with reference to recent market transactions involving identical or comparable assets. Inputs: Prices and other relevant information generated by market transactions involving land assets were considered.

Land 489,708 408,677 3 Market Approach

Inputs: Prices and other relevant information generated by market transactions involving land assets were considered. Significant professional judgement has been utilised.

Buildings 173,597 175,554 2 Market Approach

Inputs: Prices and other relevant information generated by market transactions involving building assets were considered.

Buildings 3,235 1,764 3 Market Approach

Inputs: Prices and other relevant information generated by market transactions involving building assets were considered. Significant professional judgement has been utilised.

Buildings 570,765 568,481 2

Income Approach

: Converts future amounts (cash flows or income and expenses) to a single current (i.e. discounted) amount. The fair value measurement is determined on the basis of the value indicated by current market expectations about those future amounts. Inputs: Market rental transaction of comparable assets, adjusted to reflect differences in price sensitive characteristics. Capitalisation rates as represented by the income produced by an investment, expressed as a percentage of the assets value.

Buildings 17,997 - 3 Income Approach

Inputs: Market rental transaction of comparable assets, adjusted to reflect differences in price sensitive characteristics. Capitalisation rates as represented by the income produced by an investment, expressed as a percentage of the assets value. Significant professional judgement.

Buildings 553,090 520,481 3

Depreciated Replacement Cost:

The amount a market participant would be prepared to pay to acquire or construct a substitute asset of comparable utility, adjusted for physical depreciation and obsolescence. Inputs: Current prices for substitute assets. Physical depreciation and obsolescence has been determined based on professional judgement regarding physical, economic and external obsolescence factors relevant to the assets under consideration.

Leasehold Improvements 200,162 246,820 3 Depreciated Replacement Cost

Inputs: Current prices for substitute assets. Physical depreciation and obsolescence has been determined based on professional judgement regarding physical, economic and external obsolescence factors relevant to the assets under consideration.

186

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.2A: Fair Value Measurements, Valuation Techniques and Inputs Used (continued)

Fair value measurements at the end of the reporting period

Valuation Technique(s) and Inputs Used

2019 2018 Category

$'000 $'000 (Level 1, 2 or 3)

Plant and Equipment 203,384 226,996 2 Market Approach

Inputs: Prices and other relevant information generated by market transactions involving plant and equipment assets were considered.

Plant and Equipment 956 895 3 Market Approach

Inputs: Prices and other relevant information generated by market transactions involving plant and equipment assets were considered. Significant professional judgement has been utilised.

Plant and Equipment 99,899 53,004 3 Depreciated Replacement Cost

Inputs: Current prices for substitute assets. Physical depreciation and obsolescence has been determined based on professional judgement regarding physical, economic and external obsolescence factors relevant to the assets under consideration.

Total Non-financial assets

3,796,623

3,615,165

Total fair value measurement of assets in the statement of financial position

3,796,623

3,615,165

Assets not measured at fair value in the statement of financial position: 2019 2018

$'000 $'000

Land

1 19,141 - Market Approach

Inputs: Prices and other relevant information generated by market transactions involving land assets were considered. Buildings

1 477 - Market Approach.

Inputs: Prices and other relevant information generated by market transactions involving build assets were considered.

Total non-financial assets 19,618 -

Total assets not measured at fair value in the statement of financial position 19,618 -

1. In 2019, DFAT reclassified one land and one building in Manila to asset held for sale. The land and building were measured at fair value less cost to sell at 30 June 2019.

187

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.2B: Reconciliation for Recurring Level 3 Fair Value Measurements

Non-Financial assets - 2019

Land Buildings

Leasehold improve-ments

Plant and equipment Total

$'000 $'000 $'000 $'000 $'000

Opening balance - 1 July 2018 408,677 522,245 246,820 53,899 1,231,641

Total gains / (losses) recognised in other comprehensive income1 20,089 13,719 (50,685) (8,563) (25,440)

Reclassifications - - - - -

Purchases 5,682 36,957 4,027 56,112 102,778

Disposals - - - (593) (593)

Transfers into Level 32 55,710 4,188 - - 59,898

Transfers out of Level 33 (450) (2,787) - - (3,237)

Closing balance - 30 June 2019 489,708 574,322 200,162 100,855 1,365,047

Non-Financial assets - 2018

Land Buildings

Leasehold improve-ments

Plant and equipment Total

$'000 $'000 $'000 $'000 $'000

Opening balance - 1 July 2017 368,704 377,602 279,316 55,522 1,081,144

Total gains / (losses) recognised in other comprehensive income1 23,537 21,718 (53,935) (25,900) (34,580)

Reclassifications - (14) - 14 -

Purchases - - 24,298 104 24,402

Disposals - - (2,859) (4,297) (7,156)

Transfers into Level 32 18,318 123,497 - 33,204 175,019

Transfers out of Level 3 (1,882) (558) - (4,748) (7,188)

Closing balance - 30 June 2018 408,677 522,245 246,820 53,899 1,231,641

1. These gains / (losses) are presented in the Statement of Comprehensive Income under Depreciation and Amortisation, Write-down and Impairment of Assets, and change resulting from asset revaluation. 2. There have been transfers of land and buildings assets into Level 3 due to a combination of, limited market transactions, use of significant professional judgement, or a change in the valuation technique from the market approach to depreciated replacement

cost approach. 3. There have been transfers of land and buildings assets out of Level 3 due to a combination of, the identification of market transactions, or a change in the valuation technique from the depreciated replacement cost approach to the market approach.

188

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7.3 Financial Instruments

2019 2018

$'000 $'000

Note 7.3A: Categories of Financial Instruments Notes

Financial assets under AASB 139

Loans and receivables

Cash and cash equivalents 3.1A 405,943

Goods and services receivables (gross) 3.1B 61,426

Cash held by outsiders 3.1B 221

Total loans and receivables 467,590

Financial assets under AASB 9

Financial assets at amortised cost

Cash and cash equivalents 3.1A 430,643

Goods and services receivables (gross) 3.1B 87,073

Cash held by outsiders 3.1B 159

Total financial assets at amortised cost 517,875

Total financial assets 517,875 467,590

Financial liabilities

Financial liabilities measured at amortised cost

Trade creditors and accruals 3.3A 97,347 74,935

Total financial liabilities measured at amortised cost 97,347 74,935

Total financial liabilities 97,347 74,935

Classification of financial assets on the date of initial application of AASB 9

Financial assets class Notes

AASB 139 original classification

AASB 9 new classification

AASB 139 carrying amount at 1 July 2018

AASB 9 carrying amount at 1 July 2018

$'000 $'000

Cash on hand or on deposit 3.1A

Loans and receivable Amortised Cost 405,943 405,943

Goods and services receivable (gross) 3.1B

Loans and receivable Amortised Cost 61,426 61,426

Cash held by outsiders 3.1B

Loans and receivable Amortised Cost 221 221

Total financial assets 467,590 467,590

189

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Reconciliation of carrying amounts of financial assets on the date of initial application of AASB 9

Financial assets class

AASB 139 carrying amount at 1 July 2018 Reclassification Re-measurement

AASB 9 carrying amount at 1 July 2018

$'000 $'000 $'000 $'000

Financial assets at amortised cost

Loans and receivable

Cash on hand or on deposit 405,943 - - 405,943

Goods and services receivable (gross) 61,426 - - 61,426

Cash held by outsiders 221 - - 221

Total amortised cost 467,590 - - 467,590

Accounting policy

Accounting policies for financial assets can be found in Note 3.1: Financial Assets. Accounting policies for financial liabilities can be found in Note 3.3: Payables.

There is no change in carrying amount based on measurement under AASB 139 and transition to AASB 9.

2019 2018

$'000 $'000

Note 7.3B: Net Gains or Losses on Financial Assets

Financial assets at amortised cost

Foreign exchange gains / (losses) 3,461 (3,760)

Write-down of financial assets 1.1C (21) (86)

Movement in impairment loss allowance 1.1C 12 (111)

Net gains / (losses) on financial assets at amortised cost 3,452 (3,957)

Net gains / (losses) on financial assets 3,452 (3,957)

Note 7.3C: Net Gains or Losses on Financial Liabilities

Financial liabilities measured at amortised cost

Foreign exchange gains 1,682 9,306

Net gains on financial liabilities measured at amortised cost 1,682 9,306

Net gains on financial liabilities 1,682 9,306

190

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7.4 Administered - Fair Value Measurements The following tables provide an analysis of administered assets and liabilities measured at fair value. The remaining assets and liabilities disclosed in the Schedule of Administered Assets and Liabilities do not apply the fair value hierarchy. See Note 7.2: Fair Value Measurements for an overview of the different levels of the fair value hierarchy and techniques and inputs used to determine fair value.

Note 7.4A: Fair Value Measurements, Valuation Techniques and Inputs Used

Fair value measurements at the end of the

reporting period using

For Levels 2 and 3 fair value measurements

2019

2018

Level

Valuation

$'000

$'000

(1, 2 or 3)

technique(s)

1

Inputs used

2

Financial assets:

Other investments:

Non-monetary available-for-sale

-

2,291,000

3

Discounted cash flow method

A discounted rate range using the “build up” method based on the following components: risk free rate (20 year US government bond rate), currency risk premium, sovereign risk premium and liquidity risk premium to discount the expected loan principal repayments of the loan portfolio of IDA and ADF.

IDA and ADF subscriptions

Non-monetary IDA and ADF subscriptions at FVOCI

2,445,947

-

3

Discounted cash flow method

A discounted rate range using the “build up” method based on the following components: risk free rate (20 year US government bond rate), currency risk premium, sovereign risk premium and liquidity risk premium to discount the expected loan principal repayments of the loan portfolio of IDA and ADF.

Investment in Efic's Commercial Account

539,300

444,964

3

Net asset position

Balance sheet of Export Finance and Insurance Corporation's Commercial Account.

Tourism Australia

20,991

20,200

3

Net asset position

Balance sheet of Tourism Australia.

Total financial assets

3,006,238

2,756,164

Non-financial assets:

Plant and Equipment

-

19

2

Market approach

Adjusted market transactions

Total non-financial assets

-

19

Total fair value measurements of assets in the administered schedule of assets and liabilities

3,006,238

2,756,183

191

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.4A: Fair Value Measurements, Valuation Techniques and Inputs Used (continued)

Fair value measurements at the end of the

reporting period using

For Levels 2 and 3 fair value measurements

2019

2018

Level

Valuation

$'000

$'000

(1, 2 or 3)

technique(s)

1

Inputs used

2

Financial liabilities:

Multilateral grants

930,179

1,110,323

3

Discounted cash flow method

A 10 year Australian government bond rate is used to discount the expected payment schedules of each loan agreement.

Multilateral contributions payable

494,521

572,495

3

Discounted cash flow method

A 10 year Australian government bond rate and a discounted rate range (comprising a risk free rate (20 year US government bond rate), and currency, sovereign and liquidity risk premium) is used to discount the expected payment schedules of each loan agreement.

Total financial liabilities

1,424,700

1,682,818

Total fair value measurements of liabilities in the administered schedule of assets and liabilities

1,424,700

1,682,818

There have been no transfers between levels during the year (2018: nil). DFAT's policy for determining when transfers between levels are deemed to have occurred can be found in Note 7.2: Fair Value Measurements.

Fair value measurements - highest and best use differs from current use for non-financial assets

DFAT's Administered assets are held for operational purposes and not held for the purposes of deriving a profit. The current use of all controlled assets is considered their highest and best use.

1. There have been no changes to valuation techniques used. 2. There were no significant inter-relationships between unobservable inputs that materially affect fair value.

The future economic benefits of DFAT's assets are not primarily dependent on their ability to generate cash flows. DFAT has not disclosed quantitative information about the significant unobservable inputs for the department's assets.

192

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.4B: Reconciliation for recurring Level 3 fair value measurements

Recurring Level 3 fair value measurements - reconciliation for assets

Financial assets

Non-financial assets

Investments

Total

Leasehold improvements

Total

2019

2019

2019

2019

$'000

$'000

$'000

$'000

Opening balance - 1 July 2018

2,756,164

2,756,164

-

-

Total gains / (losses) recognised in net cost of services

1

-

-

-

-

Total (losses) recognised in other comprehensive income

2

250,074

250,074

-

-

Closing balance - 30 June 2019

3,006,238

3,006,238

-

-

Changes in unrealised gains / (losses) recognised in net cost of services for assets held at the end of the reporting period

3

-

-

-

-

Financial assets

Non-financial assets

Investments

Total

Leasehold improvements

Total

2018

2018

2018

2018

$'000

$'000

$'000

$'000

Opening balance - 1 July 2017

2,367,368

2,367,368

81

81

Total (losses) recognised in net cost of services

1

394,987

394,987

(81)

(81)

Total gains recognised in other comprehensive income

2

(6,191)

(6,191)

-

-

Closing balance - 30 June 2018

2,756,164

2,756,164

-

-

Changes in unrealised gains / (losses) recognised in net cost of services for assets held at the end of the reporting period

3

-

-

-

-

193

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.4B: Reconciliation for recurring Level 3 fair value measurements (continued)

Recurring Level 3 fair value measurements - reconciliation for liabilities

Financial Liabilities

Multilateral grants

Multilateral

contributions payable

Total

2019

2019

2019

$'000

$'000

$'000

Opening balance - 1 July 2018

980,661

702,157

1,682,818

Total gains / (losses) recognised in net cost of services

4

311,916

(53,123)

258,793

Settlements

(362,398)

(154,513)

(516,911)

Closing balance - 30 June 2019

930,179

494,521

1,424,700

Changes in unrealised gains / (losses) recognised in net cost of services for assets held at the end of the reporting period

3

-

-

-

Financial Liabilities

Multilateral grants

Multilateral

contributions payable

Total

2018

2018

2018

$'000

$'000

$'000

Opening balance - 1 July 2017

1,071,059

893,229

1,964,288

Total gains recognised in net cost of services

4

49,435

56,492

105,927

Settlements

(139,833)

(247,564)

(387,397)

Closing balance - 30 June 2018

980,661

702,157

1,682,818

Changes in unrealised gains / (losses) recognised in net cost of services for assets held at the end of the reporting period

3

-

-

-

1. These gains / (losses) are represented in the Administered Schedule of Comprehensive Income and in Note 2.1B: Multilateral Replenishments and Other Loans, Note 2.2B: Multilateral Replenishments and Other Loans and Note 2.1E: Other Expenses. 2. These gains / (losses) are represented in the Administered Schedule of Comprehensive Income. 3. There are no unrealised gains (losses) for level 3 assets and liabilities in the Administered Schedule of Comprehensive Income as at both 30 June 2019 and 30 June 2018. 4. These gains / (losses) are represented in the Administered Schedule of Comprehensive Income and in Note 2.1B: Multilateral Replenishments and Other Loans. The comparative figures have not been updated in line with Note 4.3A: Grants and Note 4.3B: Other payables as the impacts of the movement have been incorporated in the current year.

194

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7.5 Administered - Financial Instruments

2019 2018

$'000 $'000

Note 7.5A: Categories of Financial Instruments

Financial Assets under AASB 139

Loans and receivables

Cash and cash equivalents 1,005

Goods and services receivables 24

Concessional loan receivable 156,142

Net position of Efic - NIA 13,394

Traveller Emergency Loans 564

Total loans and receivables 171,129

Available-for-sale financial assets

Non-monetary available for sale debt instrument - fair value 2,291,000

Efic - Commercial Account 444,964

Tourism Australia 20,200

Total available-for-sale 2,756,164

Financial Assets under AASB 9

Financial assets at amortised cost

Cash and cash equivalents 41,796

Goods and services receivables 6

Concessional loan receivable 159,088

Net position of Efic - NIA 15,120

Traveller Emergency Loans 543

Total financial assets at amortised cost 216,553

Financial assets at fair value through other comprehensive income (FVOCI)

Non-monetary equity instrument - fair value 2,445,947

Efic - Commercial Account 539,300

Tourism Australia 20,991

Total financial assets at fair value through other comprehensive income 3,006,238

Total financial assets 3,222,791 2,927,293

Financial Liabilities

Financial liabilities measured at amortised cost

International development assistance and other payables 136,599 187,438

Total financial liabilities measured at amortised cost 136,599 187,438

Financial liabilities at fair value through profit or loss

Multilateral grants payable 930,179 1,110,323

Multilateral contributions payable 494,521 572,495

Total financial liabilities at fair value through profit or loss 1,424,700 1,682,818

Total financial liabilities 1,561,299 1,870,256

195

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.5A: Categories of Financial Instruments (continued)

Classification of financial assets on the date of initial application of AASB 9

Financial assets class Notes

AASB 139 original classification AASB 9 new

classification

AASB 139 carrying amount at 1 July 2018

AASB 9 carrying amount at 1 July 2018

$'000 $'000

Cash and cash equivalents

Loans and receivable

Amortised cost 1,005 1,005

Goods and services receivables

Loans and receivable

Amortised cost 24 24

Concessional loan receivable

Loans and receivable

Amortised cost 156,142 156,142

Net position of Efic - NIA

Loans and receivable

Amortised cost 13,394 13,394

Traveller Emergency Loans

Loans and receivable

Amortised cost 564 564

Non-monetary instrument - fair value

Available-for-sale financial assets - Debt instrument

FVOCI - Equity instrument 2,291,000 2,291,000

Efic - Commercial Account

Available-for-sale financial assets FVOCI 444,964 444,964

Tourism Australia

Available-for-sale financial assets FVOCI 20,200 20,200

Total financial assets 2,927,293 2,927,293

Reconciliation of carrying amounts of financial assets on the date of initial application of AASB 9

AASB 139 carrying amount at 1 July 2018 Reclassification Re-measurement

AASB 9 carrying amount at 1 July 2018

$'000 $'000 $'000 $'000

Financial assets at amortised cost

Loans and receivable

Cash and cash equivalents 1,005 - - 1,005

Goods and services receivables 24 - - 24

Concessional loan receivable 156,142 - - 156,142

Net position of Efic - NIA 13,394 - - 13,394

Traveller Emergency Loans 564 - - 564

Total amortised cost 171,129 - - 171,129

Financial assets at fair value through other comprehensive income

Available-for-sale financial assets

Non-monetary equity instrument - fair value 2,291,000 - - 2,291,000

Efic - Commercial Account 444,964 - - 444,964

Tourism Australia 20,200 - - 20,200

Total fair value through other comprehensive income 2,756,164 - - 2,756,164

196

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

2019 2018

$'000 $'000

Note 7.5B: Net Gains or Losses on Financial Assets

Financial assets at amortised cost

Interest revenue 12,868 13,120

Impairment (104) (510)

Write-off (138) (218)

Dividend revenue 6,941 5,791

Competitive neutrality revenue 8,082 7,331

Gains recognised in profit or loss for reversal of impairment - 388,725

Net gain / (loss) on financial assets at amortised cost 27,649 414,239

Financial assets at fair value through other comprehensive income

Revaluation gain / (loss) recognised in equity 95,127 (6,191)

Net gain / (loss) on financial assets at fair value through other comprehensive income 95,127 (6,191) Net gain on financial assets 122,776 408,048

Note 7.5C: Net Gains or Losses on Financial Liabilities

Financial liabilities measured at amortised cost

Exchange (loss) / gains (3,107) (2,891)

Net gain on financial liabilities measured at amortised cost (3,107) (2,891)

Financial liabilities at fair value through profit or loss (held for trading)

Loss on remeasuring at fair value through profit or loss (137,056) (26,505)

Net (loss) on financial liabilities at fair value through profit or loss (held for trading) (137,056) (26,505) Net (loss) on financial liabilities (140,163) (29,396)

197

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.5D: Fair Value of Financial Instruments

Carrying amount

Fair value

Carrying amount

Fair value

2019

2019

2018

2018

$'000

$'000

$'000

$'000

Financial Assets

Cash and cash equivalents

41,796

41,796

1,005

1,005

Receivables for goods and services

6

6

24

24

Concessional loans receivable

159,088

159,088

156,142

156,142

Net position of Efic - NIA

15,120

15,120

13,394

13,394

Traveller emergency loans

543

543

564

564

Investments - available for sale

-

-

2,291,000

2,291,000

Investments - held at FVOCI

2,445,947

2,445,947

-

-

Investments - Efic

539,300

539,300

444,964

444,964

Investments - Tourism Australia

20,991

20,991

20,200

20,200

Total financial assets

3,222,791

3,222,791

2,927,293

2,927,293

Financial liabilities

Trade creditors

136,599

136,599

187,438

187,438

Grants payable - at fair value through profit or loss

930,179

930,179

1,110,323

1,110,323

Multilateral contributions payable IDA at fair value through profit or loss

494,521

494,521

572,495

572,495

Total financial liabilities

1,561,299

1,561,299

1,870,256

1,870,256

Fair value measurements categorised by fair value hierarchy The table at Note 7.4A: Fair Value Measurements, Valuation Techniques and Inputs Used provides an analysis of financial instruments that are measured at fair value, by valuation method.

198

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.5E: Credit Risk

Recognised in the DFAT Administered Accounts DFAT's senior executive has endorsed policies and procedures for debt management (including the provision of credit terms) to reduce the incidence of credit risk. Collateral is not required on any loan.

Credit risk is the possibility that a debtor will not repay all or a portion of a loan or will not repay in a timely manner and will therefore cause a loss to DFAT. DFAT has exposure to concentrations of credit risk with regard to the ‘loan receivable’ and the ‘non-monetary equity instrument at FVOCI’. The maximum exposure DFAT has to credit risk at reporting date in relation to each class of recognised financial assets is presented in the following table excluding any collateral or credit enhancements.

DFAT has assessed the risk of default on payment and has allocated $2,422 (2018: $2,321) to an impairment allowance for doubtful debts account. DFAT has no collateral to mitigate against credit risk. Maximum exposure to credit risk (excluding any collateral or credit enhancements)

2019

2018

$'000

$'000

Credit quality of financial instruments not best representing maximum exposure to credit risk

Amortised cost

176,708

177,225

Fair value through other comprehensive income

3,006,238

2,756,164

Total credit quality of financial instruments not best representing maximum exposure to credit risk

3,182,946

2,933,389

Credit quality of financial liabilities not best representing maximum exposure to credit risk

Amortised cost

136,599

187,438

Through profit or loss

1,424,700

1,682,818

Total credit quality of financial liabilities best representing maximum exposure to credit risk

1,561,299

1,870,256

Credit quality of financial assets not past due or individually determined as impaired

Not past due

Not past due

Past due or

Past due or

or impaired

or impaired

impaired

impaired

2019

2018

2019

2018

$'000

$'000

$'000

$'000

Loans and receivables

175,716

174,883

992

2,342

Fair value through other comprehensive income

3,006,238

2,756,164

-

-

Total

3,181,954

2,931,047

992

2,342

199

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.5F: Liquidity Risk

The continued existence of DFAT in its present form and with its present programs is dependent on government policy and on continuing appropriations by Parliament for DFAT’s administration and programs. The probability of the Government encountering difficulties meeting its administered financial obligations is less than remote.

Maturities for non-derivative financial liabilities 2019

On

Within 1

Between 1

Between 2

More than

demand

year

to 2 years

to 5 years

5 years

Total

$'000

$'000

$'000

$'000

$'000

$'000

Financial liabilities measured at amortised cost

-

136,599

-

-

-

136,599

Financial liabilities at fair value through profit or loss

-

204,394

307,539

683,465

229,302

1,424,700

Total

-

340,993

307,539

683,465

229,302

1,561,299

Maturities for non-derivative financial liabilities 2018

On

Within 1

Between 1 to

Between 2 to

More than

demand

year

2 years

5 years

5 years

Total

$'000

$'000

$'000

$'000

$'000

$'000

Financial liabilities measured at amortised cost

-

187,438

-

-

-

187,438

Financial liabilities at fair value through profit or loss

-

291,253

336,104

716,332

339,129

1,682,818

Total

-

478,691

336,104

716,332

339,129

1,870,256

DFAT had no derivative financial liabilities in both the current and prior financial year.

200

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Note 7.5G: Market Risk

Market risk is defined as the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises the following types of risk, either alone or in combination: interest rate risk, sovereign risk and liquidity risk (for the purposes of discounting the future value of the non-monetary equity instrument held at FVOCI); currency risk (for the purposes of converting to Australian dollars the discounted United States dollar value of the non-monetary equity instrument held at FVOCI); and the 10-year government bond rate for the purposes of discounting future liabilities relating to multilateral loan and grant commitments. The following sensitivity analysis discloses the effect that a reasonable possible change in each risk variable, either alone, or in total, would have on DFAT’s administered income and expenses.

The following table illustrates the effect on DFAT's administered net income less expenses and equity as at 30 June 2019 from 8.7% (2018: 9.2%) increase or decrease against the AUD in the currencies in which the financial instruments were administered by DFAT with all other variables held constant.

Sensitivity analysis of the risk that the entity is exposed to for 2019

Risk variable

Change in risk variable

Effect on

Profit and loss Equity

% $'000 $'000

Currency risk $/USD + 8.7% (195,766) (195,766)

Currency risk $/USD - 8.7% 233,075 233,075

Interest rate risk Discount rates + 0.2% (70,312) (70,312)

Interest rate risk Discount rates - 0.2% (30,694) (30,694)

Sensitivity analysis of the risk that the entity is exposed to for 2018

Risk variable

Change in risk variable

Effect on

Profit and loss Equity

% $'000 $'000

Currency risk $/USD + 9.2% (192,844) (192,844)

Currency risk $/USD - 9.2% 232,168 232,168

Interest rate risk Discount rates + 0.2% (24,964) (24,964)

Interest rate risk Discount rates - 0.2% 18,195 18,195

All other items are denominated in AUD and are not subject to market risk due to exchange fluctuations.

201

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7.6 Administered - Defined Benefit Pension Schemes

2019 2018

$'000 $'000

The amounts recognised in the Administered Schedule of Assets and Liabilities are as follows: Present value of funded obligations 61,970 57,712

Fair value of plan assets (40,361) (37,767)

21,609 19,945

Present value of unfunded obligations 56,004 49,664

Net liability in schedule of administered assets and liabilities 77,613 69,609

Movements in the net liability recognised in the Administered Schedule of Assets and Liabilities as follows:

Net liability at the start of the year 69,609 73,403

Adjustment for addition of Port Louis Scheme net liability 76 -

Exchange differences on foreign plans 3,126 2,966

Net expense recognised in the Administered Schedule of Comprehensive Income 3,792 3,802

Net actuarial losses / (gains) 5,309 (6,414)

Contributions by employers (4,299) (4,148)

Net liability at the end of the year 77,613 69,609

Reconciliation of opening and closing balance of the defined benefit obligation:

Opening liability 107,375 110,624

Adjustment for addition of Port Louis Scheme liabilities 554 -

Exchange differences on foreign plans 3,860 4,714

Service cost 1,328 1,302

Interest cost 3,529 3,557

Contributions by plan participants (funded schemes) 56 55

Actuarial (gains) due to experience (1,758) (1,223)

Actuarial losses / (gains) due to changes in financial assumptions 8,060 (2,186)

Actuarial (gains) due to changes in demographic assumptions (168) (3,823)

Benefits paid (4,862) (5,645)

Closing liability 117,974 107,375

Reconciliation of opening and closing balance of the fair value of plan assets:

Opening assets 37,767 37,221

Adjustment for addition of Port Louis Scheme assets 477 -

Exchange differences on foreign plans 734 1,748

Expected return on plan assets 1,065 1,057

Contributions by plan participants (funded schemes) 56 55

Contributions by employer 1,068 1,008

Actuarial gains / (losses) 825 (817)

Benefits paid (1,631) (2,505)

Closing liability 40,361 37,767

202

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7.6 Administered - Defined Benefit Pension Schemes (continued)

2019 2018

$'000 $'000

The amounts recognised in the Administered Schedule of Comprehensive Income are as follows:

Current service cost 1,328 1,301

Net interest on net defined benefit liability 2,464 2,500

Total included 'employee benefit expense account' 3,792 3,801

Amounts recognised directly in administered equity

Financial year ended

2019 2018

$'000 $'000

Actuarial (losses) / gains (5,309) 6,414

Cumulative amounts of losses recognised in administered equity

Financial year ended

2019 2018

$'000 $'000

Actuarial gains / (losses) (42,959) (37,649)

Pension Scheme Assets The fair value of scheme assets is represented by:

Financial year ended

2019 2018

Cash N/A 0.2%

Insured Pensioner 1.7% 1.3%

Investment in LIC India 4.5% 4.0%

Diversified Growth Fund 76.2% 76.8%

Liability Driven Investments 16.3% 17.7%

Deposit Administration Policy 1.3% N/A

Fair Value of pension scheme assets

The fair value of scheme assets does not include amounts relating to: - any of DFAT's (and the Australian Government's) own financial instruments, and - any property occupied by, or other assets used by DFAT (or the Australian Government).

Principal actuarial assumptions at the reporting date (expressed as weighted averages):

Financial year ended

2019 2018

Discount rate at 30 June 2.79% 3.09%

Expected return on assets at 30 June

Salary growth 3.04% 2.85%

Price inflation 3.07% 2.98%

Pension growth 2.82% 2.72%

203

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

7.6 Administered - Defined Benefit Pension Schemes (continued)

Historical Information

Financial year ended

2019 2018 2017 2016 2015

$'000 $'000 $'000 $'000 $'000

Present value of defined benefit obligations (117,974) (110,624) (116,122) (113,794) (88,666)

Fair value of scheme assets 40,361 37,221 36,095 41,886 30,669

(Deficit) in the scheme (77,613) (73,403) (80,028) (71,908) (57,997)

Actuarial gains / (losses) - net liabilities (5,309) 2,991 (8,618) (7,108) (7,069)

Effect of exchange rate gains / (losses) (3,126) 3,213 254 (10,877) (453)

Expected Employer Contributions

Financial year ended

2020 2019

$'000 $'000

Expected employer contributions 4,174 4,054

Scheme information

DFAT administers on behalf of the Australian Government, defined benefit pension schemes for locally engaged staff across a number of agencies at posts in London, Port Louis and New Delhi, and also Ottawa and Washington (the North American Pension Scheme). Port Louis and New Delhi are still open to new employees. All schemes, with the exception of the New Delhi Gratuity Scheme, provide pensions that are linked to final salaries. Figures disclosed are based on formal actuarial reviews that are generally conducted triennially and reviewed and updated by the actuary on an annual basis. The New Delhi, Port Louis and London schemes are partially funded and the North American Pension Scheme is fully unfunded. Contributions for the North American Scheme are made to the Consolidated Revenue Fund, which will provide funding for the benefits payable under the scheme.

Weighted average maturity profile of defined benefit obligation

Financial year ended 2019 2018

Weighted average duration of defined benefit obligation (years) 13.55 13.67

Sensitivity to assumptions

DFAT’s defined benefit obligation at the reporting date has been determined using actuarial calculations that require assumptions about future events. The estimated sensitivity of the defined benefit obligation to each significant assumption shown below has been determined at an individual scheme level if each assumption were changed in isolation. In practice, the schemes are subject to multiple external experience items which may vary the defined benefit obligation over time. The methods and assumptions used in preparing these sensitivity results remain consistent with those used in previous reporting periods.

The estimated effects of variations in the principal actuarial assumptions on DFAT’s defined benefit obligation at the reporting date are as follows: Increase / (decrease) in defined benefit obligation

Financial year ended

2019 2018

$'000 $'000

Discount rate

Increase of 0.5% (8,100) (7,326)

Decrease of 0.5% 8,419 7,612

Future salary increases

Increase of 0.5% 554 392

Decrease of 0.5% (533) (377)

Future inflation increases

Increase of 0.5% 8,277 7,132

Decrease of 0.5% (8,033) (6,930)

204

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

8. Other Information 8.1 Aggregate Assets and Liabilities

2019 2018

$'000 $'000

Note 8.1A: Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months 1,036,576 1,017,428

More than 12 months 3,942,010 3,762,117

Total assets 4,978,586 4,779,545

Liabilities expected to be settled in:

No more than 12 months 275,565 232,260

More than 12 months 212,489 178,697

Total liabilities 488,054 410,957

Note 8.1B: Administered - Aggregate Assets and Liabilities

Assets expected to be recovered in:

No more than 12 months 72,492 37,642

More than 12 months 3,168,544 2,916,585

Total assets 3,241,036 2,954,227

Liabilities expected to be settled in:

No more than 12 months 346,833 408,191

More than 12 months 1,301,409 1,541,676

Total liabilities 1,648,242 1,949,867

205

Notes to and forming part of the Financial Statements

Financial statements

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

8.2 Budgetary Reporting - Explanation of Major Variances

8.2A: Explanation of Major Departmental Variances

The following provides explanations of major variances between DFAT’s original budget estimates, as published in the 2018-19 Portfolio Budget Statements (PBS) and the final outcome for the financial year, as presented, in accordance with the Australian Accounting Standards. Major variances are those relevant to an analysis of DFAT’s performance, not merely on numerical differences between the actual amounts and budget. Unless otherwise individually significant, no additional commentary has been included.

There are a number of items not incorporated into PBS estimates due to their unpredictable, uncontrollable and / or unplanned nature. This includes:  The write-down, impairment and sale of assets reported in the Statement of Comprehensive Income;  Gains or losses from foreign exchange differences reported in the Statement of Comprehensive Income and Cash Flow

Statement;  Accounting adjustments for DFAT's provision for the future make-good of leasehold improvements in leased properties reported in the Statement of Comprehensive Income and Statement of Changes in Equity; and,  Adjustments to revenue from Government for no-win / no-loss funding arrangements with the Department of Finance

which are reported in the Statement of Comprehensive Income.

Additionally, DFAT does not estimate or factor in revaluation adjustments for land, buildings and plant and equipment assets as these movements are beyond DFAT's control and are difficult to predict. This item impacts other comprehensive income reported in the Statement of Comprehensive Income and Statement of Changes in Equity and non-financial asset balances reported in the Statement of Financial Position.

Major variances between actual figures reported in the financial statement and the PBS estimates include:  Revenue from Government increased by $33.1m (2.4%) due to an increase in operating funding which occurred through 2018-19 Portfolio Additional Estimates and a net increase in no-win / no-loss funding arrangements with the Department of Finance. This has a flow on effect on employees and suppliers on Statement of Comprehensive Income and Cash Flow

Statement;  Employee benefits increased by $71.1m (9.1%) and employee provisions increased by $56.2m (25.8%) primarily due to a decrease in the long term Government bond rate used for valuing employee provisions and an increase in FBT expenses due to increased living away from home allowances and accommodation payments for staff posted overseas, affected by

the devaluation of the Australian dollar;  Supplier payables decreased by $23.9m (15.6%) and other payables increased by $24.9m (71.3%) due to timing of invoices received and cash payments at the close of the reporting period;  Cash and cash equivalents are $64.2m (17.5%) higher due to a larger than estimated closing balance of the overseas

property special account attributable to lower than expected disbursements on property works; and,  Assets held for sale of $19.6m and not budgeted for, relates to a property in Manila.

The Cash Flow Statement variance to budget analysis also includes variances due to items excluded from PBS estimates. Excluded items are section s74 receipts transferred to the Official Public Account (OPA) and subsequently re-drawn as appropriations, estimated cash transfers to and from the OPA for the OPO Special Account, returns of equity such as through lapsed appropriations and GST payments to suppliers and subsequent refunds received from the Australian Taxation Office.

206

DFAT Annual Report 2018-19

Department of Foreign Affairs and Trade NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

8.2B: Explanation of Major Administered Variances

There are a number of items excluded from the Portfolio Budget Statement (PBS) estimates on the Administered Schedule of Comprehensive Income, due to the unpredictable, uncontrollable and/or unplanned nature of some transactions, specifically items such as contributions, unplanned revenue and gains and Efic NIA income.

Further, DFAT does not estimate or factor in adjustments for re-measurement of the net liability for defined benefit pension schemes, revaluation of property, plant and equipment assets or movements in the carrying amount of investments, on the Administered Schedule of Assets and Liabilities for PBS purposes. Nor does it estimate the corresponding entries in Other Comprehensive Income (100.0% variance) as part of the PBS estimates. This is because the main factors that drive these movements are beyond DFAT's control, such as movements due to changes in the value of the Australian Dollar (AUD) on currency markets.

Overall expenses are $91.2m (2.3%) higher primarily due to a decision made by Government as part of the 2019-20 Federal Budget process to bring forward payments of $170.0m for existing multilateral replenishments into 2018-19. This was offset by reductions in other grant and contributions of $68.5m (13.1%). The budget estimates are based on obligations to pay as assessed by international organisations such as the United Nations (UN) whereas actual contributions paid depend on resolutions passed by UN members. Driving the reduction is a range of decisions made by the UN members that passed resolutions relating to discontinuing or reducing certain peacekeeping missions during the year.

Total administered revenue is $52.3m (7.5%) lower than budget. Passport and consular fees, which comprise the majority of fees and charges collected, have increased only marginally in 2018-19 with the number of passports issued increasing only 1.7% over the previous year. Demand for passports has not met budget expectations. Consequently, fees and charges are below budget by $47.4m (7.8%). Efic NIA revenue is $4.8m (15.5%) higher than budget, as amounts are settled in foreign currencies (primarily in USD) before being converted to AUD, the drop in conversion rates has resulted in more revenue being recorded.

There were lower than budgeted returns of prior year administered expenses reported as revenue of $14.2m (42.5%), which relate to unspent monies from previous funding arrangements. This figure is dependent on acquittals being completed, requires estimations of funding requirements upfront and can be subject to unforeseen circumstances in the delivery that can significantly influence the amounts spent. Accordingly, the actual funds returned and the budget can be difficult to anticipate.

Other Comprehensive Income includes the movements in the re-measurement of defined benefit schemes and the carrying amount of investments (Efic CA and Tourism Australia). The movement is primarily due to the introduction of AASB 9 which resulted in a change in classification from non-monetary available for sale debt instruments to non-monetary equity instruments at FVOCI. This resulted in a $151.0m movement that is not budgeted for as part of PBS process.

The actual cash on hand or on deposit balance reported in the Administered Schedule of Assets and Liabilities includes non-trust special account balances of $36.8m and is higher than estimated due to the appropriation receipt of $29.6m being credited to the Dubai Exposition 2020 special account in late June.

The timing of the preparation of estimates included in the PBS in March can also result in variances to actual results. PBS estimates are prepared in order to be included as part of the Federal Budget, and are based on the current financial year estimates plus adjustments prior to the finalisation of actual balances for the financial year. Significant movements and adjustments that occur late in a financial year are not able to be incorporated into the estimates, resulting in variances.

The impacts of the timing of PBS estimates are most pronounced for both investments and multilateral grants and contributions payables administered on behalf of Government reported in the Administered Schedule of Assets and Liabilities (24.4% and 25% higher respectively) due to revaluation and discounting factors applied at 30 June including the government bond rate and exchange rate fluctuations.

207

Notes to and forming part of the Financial Statements

Financial statements

Prime Minister Scott Morrison with DFAT staff in Canberra [DFAT/Nathan Fulton]

Appendixes

209

Appendix 1: Staffing overview

Table 3 All ongoing employees 2018-19

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

NSW 15 1 16 39 11 50 66

Qld 13 13 29 9 38 51

SA 2 1 3 9 3 12 15

Tas 7 2 9 6 3 9 18

Vic 25 1 26 55 13 68 94

WA 7 1 8 10 13 23 31

ACT 987 69 1,056 1,238 292 1,530 2,586

NT 2 2 7 7 9

Overseas 1,066 12 1,078 1,279 61 1,340 2,418

Americas 103 0 103 130 4 134 237

Asia 543 4 547 606 19 625 1,172

South Asia 141 0 141 99 1 100 241

Southeast Asia 311 3 314 393 10 403 717

North Asia 91 1 92 114 8 122 214

Europe 149 2 151 161 23 184 335

Middle East and Africa 125 1 126 120 2 122 248

Multilateral 29 3 32 54 4 58 90

New Zealand and the South Pacific 117 2 119 208 9 217 336

Total 2,124 87 2,211 2,672 405 3,077 5,288

Table 4 All ongoing employees 2017-18

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

NSW 17   17 42 14 56 73

Qld 10   10 29 8 37 47

SA 2 2 4 11 5 16 20

Tas 7 2 9 6 5 11 20

Vic 22 2 24 55 16 71 95

WA 7 1 8 13 12 25 33

ACT 1,003 64 1,067 1,212 276 1,488 2,555

NT 3   3 5   5 8

Overseas 1,078 7 1,085 1,260 47 1,307 2,392

Americas 103 0 103 121 4 125 228

Asia 531 0 531 610 12 622 1,153

South Asia 134 0 134 102 1 103 237

Southeast Asia 310 0 310 401 4 405 715

North Asia 87 0 87 107 7 114 201

Europe 157 1 158 161 18 179 337

Middle East and Africa 122 1 123 118 2 120 243

Multilateral 27 3 30 49 4 53 83

New Zealand and the South Pacific 138 2 140 201 7 208 348

Total 2,149 78 2,227 2,633 383 3,016 5,243

210

DFAT Annual Report 2018-19

Table 5 All non-ongoing employees 2018-19

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

NSW     0     0 0

Qld   0   0 0

SA   0   0 0

Tas   0   0 0

Vic   0 2 2 2

WA   0   0 0

ACT 20 8 28 29 13 42 70

NT   0   0 0

Overseas 264 56 320 300 98 398 718

Americas 16 3 19 20 5 25 44

Asia 81 29 110 88 46 134 244

South Asia 32 12 44 13 5 18 62

Southeast Asia 44 15 59 59 27 86 145

North Asia 5 2 7 16 14 30 37

Europe 12 10 22 23 16 39 61

Middle East and Africa 50 4 54 55 13 68 122

Multilateral 6 1 7 6 1 7 14

New Zealand and the South Pacific 99 9 108 108 17 125 233

Total 284 64 348 331 111 442 790

Table 6 All non-ongoing employees 2017-18

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

NSW     0     0 0

Qld     0     0 0

SA     0     0 0

Tas     0     0 0

Vic     0 2   2 2

WA     0     0 0

ACT 18 4 22 28 12 40 62

NT     0 1   1 1

Overseas 306 59 365 319 91 410 775

Americas 17 1 18 20 5 25 43

Asia 103 34 137 104 55 159 296

South Asia 39 9 48 19 2 21 69

Southeast Asia 58 21 79 63 34 97 176

North Asia 6 4 10 22 19 41 51

Europe 19 12 31 21 12 33 64

Middle East and Africa 59 2 61 63 11 74 135

Multilateral 7 0 7 11 0 11 18

New Zealand and the South Pacific 101 10 111 100 8 108 219

Total 324 63 387 350 103 453 840

211

Appendixes

Appendixes

Table 7 APS ongoing employees 2018-19

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

Secretary     0 1   1 1

Dir Safeguards 1   1     0 1

SES Band 3 9   9 5   5 14

SES Band 2 33   33 17   17 50

SES Band 1 110 1 111 75 5 80 191

Medical Officer Cl 5   0 1   1 1

SES unattached 13   13 10 1 11 24

Medical Officer Cl 4     0     0 0

Medical Officer Cl 3     0     0 0

EL 2 239 4 243 241 27 268 511

EL 1 465 42 507 515 129 644 1,151

APS 6 213 10 223 328 61 389 612

APS 5 226 13 239 440 93 533 772

APS 4 20   20 35   35 55

APS 3 14 1 15 25 7 32 47

APS 2     0     0 0

APS 1     0     0 0

Graduates 53   53 56 1 57 110

Non-SES unattached 64 4 68 85 21 106 174

Total 1,460 75 1,535 1,834 345 2,179 3,714

Table 8 APS ongoing employees 2017-18

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

Secretary     0 1   1 1

Dir Safeguards 1   1     0 1

SES Band 3 6   6 7   7 13

SES Band 2 37   37 14 1 15 52

SES Band 1 113   113 69 2 71 184

Medical Officer Cl 5     0 1   1 1

SES Unattached 13 1 14 6 2 8 22

Medical Officer Cl 4     0 1   1 1

Medical Officer Cl 3     0 2   2 2

EL 2 246 6 252 235 25 260 512

EL 1 437 36 473 446 113 559 1,032

APS 6 240 10 250 328 57 385 635

APS 5 244 13 257 458 98 556 813

APS 4 24   24 42 1 43 67

APS 3 13 1 14 27 9 36 50

APS 2 1   1     0 1

APS 1     0     0 0

Graduates 44   44 52 2 54 98

Non-SES unattached 67 4 71 122 26 148 219

Total 1,486 71 1,557 1,811 336 2,147 3,704

212

DFAT Annual Report 2018-19

Table 9 APS non-ongoing employees 2018-19

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

Secretary     0     0 0

Dir Safeguards     0     0 0

SES Band 3 4   4 1   1 5

SES Band 2 5   5 1   1 6

SES Band 1 3   3 1   1 4

Medical Officer Cl 5     0     0 0

SES unattached     0     0 0

Medical Officer Cl 4 3   3 1   1 4

Medical Officer Cl 3     0 1   1 1

EL 2 2   2 1 2 3 5

EL 1 8 5 13 4 5 9 22

APS 6 3 1 4 4   4 8

APS 5 3 2 5 22 5 27 32

APS 4     0   1 1 1

APS 3     0     0 0

APS 2     0     0 0

APS 1     0     0 0

Graduates     0     0 0

Non-SES unattached     0     0 0

Total 31 8 39 36 13 49 88

Table 10 APS non-ongoing employees 2017-18

Male Female Total

Full time

Part time

Total Male

Full time

Part time

Total Female

Secretary     0     0 0

Dir Safeguards     0     0 0

SES Band 3 4   4     0 4

SES Band 2 4   4 1   1 5

SES Band 1 2 1 3 1   1 4

Medical Officer Cl 5     0     0 0

SES unattached     0     0 0

Medical Officer Cl 4 5   5     0 5

Medical Officer Cl 3     0 2   2 2

EL 2 4   4   3 3 7

EL 1 4 2 6 3 3 6 12

APS 6 3 1 4 2 2 4 8

APS 5 4   4 20 4 24 28

APS 4     0 5   5 5

APS 3     0     0 0

APS 2     0     0 0

APS 1     0     0 0

Graduates     0     0 0

Non-SES unattached     0 1   1 1

Total 30 4 34 35 12 47 81

213

Appendixes

Appendixes

Table 11 APS employees by full time and part time status 2018-19

Ongoing Non-ongoing Total

Full time

Part time

Total

ongoing

Full time

Part time

Total non-

ongoing

Secretary 1   1     0 1

Dir Safeguards 1   1     0 1

SES Band 3 14   14 5   5 19

SES Band 2 50   50 6   6 56

SES Band 1 185 6 191 4   4 195

Medical Officer Cl 5 1   1     0 1

SES unattached 23 1 24     0 24

Medical Officer Cl 4     0 4   4 4

Medical Officer Cl 3     0 1   1 1

EL 2 480 31 511 3 2 5 516

EL 1 980 171 1,151 12 10 22 1,173

APS 6 541 71 612 7 1 8 620

APS 5 666 106 772 25 7 32 804

APS 4 55   55   1 1 56

APS 3 39 8 47     0 47

APS 2     0     0 0

APS 1     0     0 0

Graduates 109 1 110     0 110

Non-SES unattached 149 25 174     0 174

Total 3,294 420 3,714 67 21 88 3,802

Table 12 APS employees by full time and part time status 2017-18

Ongoing Non-ongoing Total

Full time

Part time

Total

ongoing

Full time

Part time

Total non-

ongoing

Secretary 1   1     0 1

Dir Safeguards 1   1     0 1

SES Band 3 13   13 4   4 17

SES Band 2 51 1 52 5   5 57

SES Band 1 182 2 184 3 1 4 188

Medical Officer Cl 5 1   1     0 1

SES unattached 19 3 22     0 22

Medical Officer Cl 4 1   1 5   5 6

Medical Officer Cl 3 2   2 2   2 4

EL 2 481 31 512 4 3 7 519

EL 1 883 149 1,032 7 5 12 1,044

APS 6 568 67 635 5 3 8 643

APS 5 702 111 813 24 4 28 841

APS 4 66 1 67 5   5 72

APS 3 40 10 50     0 50

APS 2 1   1     0 1

APS 1     0     0 0

Graduates 96 2 98     0 98

Non-SES unattached 189 30 219 1   1 220

Total 3,297 407 3,704 65 16 81 3,785

214

DFAT Annual Report 2018-19

Table 13 APS employment type by location 2018-19

Ongoing Non-ongoing Total

NSW 66   66

Qld 51   51

SA 15   15

Tas. 18   18

Vic. 94 2 96

WA 31   31

ACT 2,586 70 2,656

NT 9   9

Overseas 844 16 860

Americas 72 4 76

Asia 374 5 379

South Asia 72   72

Southeast Asia 206 4 210

North Asia 96 1 97

Europe 105 1 106

Middle East and Africa 107   107

Multilateral 43 1 44

New Zealand and the South Pacific 143 5 148

Total 3,714 88 3,802

Table 14 APS employment type by location 2017-18

Ongoing Non-ongoing Total

NSW 73   73

Qld 47   47

SA 20   20

Tas. 20   20

Vic. 95 2 97

WA 33   33

ACT 2,555 62 2,617

NT 8 1 9

Overseas 853 16 869

Americas 75 3 78

Asia 368 6 374

South Asia 71   71

Southeast Asia 209 5 214

North Asia 88 1 89

Europe 104 2 106

Middle East and Africa 117   117

Multilateral 41 1 42

New Zealand and the South Pacific 148 4 152

Total 3,704 81 3,785

215

Appendixes

Appendixes

Table 15 APS Indigenous employment 2018-19 and 2017-18

Reporting period 2018-19 2017-18

Ongoing 104 94

Non-ongoing 1 0

Total 105 94

2018-19 2017-18

SES Band 1 6 3

Exec. Level 2 5 9

Exec. Level 1 22 15

APS Level 6 12 14

APS Level 5 26 24

APS Level 4 16 11

APS Level 3 8 8

Graduate 10 10

Total 105 94

Table 16 APS employment arrangements 2018-19

SES Non-SES Total

Enterprise agreement   3,471 3,471

Individual flexibility arrangements     0

Australian workplace agreements     0

Common law contracts     0

Determinations under subsection 24(1) of the Public Service Act 1999 295 34 329

Total 295 3,505 3,800

* The Secretary and the Director General of the Australian Safeguards and Non-Proliferation Office have not been included in the above figures as they are statutory appointments.

216

DFAT Annual Report 2018-19

Table 17 APS employment salary ranges by classification level 2018-19

Minimum Maximum

SES 3 252,123 297,636

SES 2 224,168 291,480

SES 1 174,375 217,459

Med 5 174,375 220,898

Med 4 159,362 243,792

Med 3 146,120 203,373

EL 2 126,224 187,737

EL 1 104,481 164,339

APS 6 83,900 131,358

APS 5 76,097 113,222

APS 4 69,010 79,820

APS 3 61,585 75,743

APS 2    

APS 1    

Graduate 67,124 70,610

* Includes annualised shift penalties.

** Includes Executive Level 2 staff deployed to Head of Mission SES positions overseas.

*** The Secretary and the Director General of the Australian Safeguards and Non-Proliferation Office have not been included in the above figures as their remuneration is set by prime ministerial determinations and the Remuneration Tribunal respectively.

Table 18 APS Performance pay by classification level 2018-19

Number of employees receiving

performance pay

Aggregated (sum total) of all payments made ($)

Average of all payments made ($)

Minimum payment made ($)

Maximum payment made ($)

SES 3 - - - - -

SES 2 - - - - -

SES 1 - - - - -

EL 2 379  1,065,325  2,811  1,477  3,457

EL 1 885  1,993,723  2,253  530  2,765

APS 6 470 847,183  1,803  377  2,141

APS 5 544 849,830  1,562  814  1,678

APS 4 - - - - -

APS 3 40 50,251  1,256  536  1,342

APS 2 - - - - -

APS 1 - - - - -

Other - - - - -

Total 2,318 4,806,312

Note: SES employees do not receive performance pay.

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Appendix 2: Executive remuneration

Remuneration policies and practices SES staff are remunerated via determinations made under subsection 24 (1) of the Public Service Act . The Secretary is the delegate for any changes made to the remuneration provided by the determinations.

The remuneration of the Secretary and the Director General of the Australian Safeguards and Non-Proliferation Office is determined by the Remuneration Tribunal.

All other highly paid personnel are remunerated under the terms set out in the DFAT Enterprise Agreement 2019.

‘Other short-term benefits’ include overseas allowances, accommodation and fringe benefits tax paid on behalf of APS employees posted overseas. Employees posted overseas are remunerated in accordance with the department’s ‘overseas conditions of service’ framework. The framework exists to compensate for the differences in locations such as cost of living, hardship, and security environment. It also addresses additional costs incurred, such as family medical and educational costs, to ensure posted staff are not disadvantaged.

The department provides accommodation for staff and their families for the duration of their posting. While staff and families benefit from this provision, they do not receive direct remuneration for rental costs. Instead, relevant allowances are adjusted to recognise staff contributions for rent and utilities. The value of the rents is determined by the location of posting rather than the work or performance of individual staff.

The number of staff and reported value of total remuneration in Tables 22 and 23 reflect the high property costs and consequent rental costs in many

of the 109 locations of our embassies and high commissions, such as Hong Kong, Moscow or New York.

The total remuneration reported also covers the full rental value of properties used by ambassadors and high commissioners. It does not recognise that most official residences have a residential component and a working component, which is used to support Australian Government objectives, including engagement with local political and business representatives and visiting Australian ministers.

Remuneration governance arrangements The department’s Performance, Risk and Resourcing Committee, chaired by the Secretary, is responsible for assessing and reallocating resources across the department.

The department adjusts overseas allowances fortnightly in response to changes to the overseas environment and foreign exchange movements based on a common methodology used by all APS agencies with staff posted to Australian embassies or high commissions. These adjustments draw on data from an independent commercial provider (Conditions Abroad International ECA).

Key management personnel

The department’s key management personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities of the department. The department has determined the key management personnel to be the Secretary, Deputy Secretaries, Chief People Officer, Chief Risk Officers and Chief Finance Officer.

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Table 19 Key management personnel

Their names and the length of term as key management personnel are summarised below:

Name Position title Term as KMP

Frances Adamson Secretary 1 July 2018 - 30 June 2019

Nikki Penelope Williams Deputy Secretary 1 July 2018 - 30 June 2019

Caroline Millar Deputy Secretary 1 July 2018 - 26 September 2018

Tony Sheehan Deputy Secretary 2 October 2018 - 30 June 2019

Richard Maude Deputy Secretary 1 July 2018 - 30 June 2019

Christopher Langman Deputy Secretary 1 July 2018 - 30 June 2019

Clare Walsh Deputy Secretary 1 July 2018 - 30 June 2019

Paul Wood Chief Finance Officer 1 July 2018 - 20 May 2019

Murali Venugopal Chief Finance Officer 3 June 2019 - 30 June 2019

Daniel Sloper Chief People Officer 1 July 2018 - 30 June 2019

Suzanne McCourt Chief Risk Officer 1 January 2019 - 30 June 2019

Angela Robinson Chief Risk Officer 2 January 2019 - 30 June 2019

Chief Risk Officer was included in key management personnel effective from 1 January 2019 as per our new governance arrangements.

The following tables are prepared on an accruals basis.

Table 20

Key management personnel remuneration for the reporting period

2019

$

Short-term benefits

Base salary 3,307,575

Bonus -

Other benefits and allowances 209,538

Total short-term benefits 3,517,113

Superannuation 526,339

Total post-employment benefits 526,339

Long service leave 75,081

Other long-term benefits -

Total other long-term employee benefits 75,081

Termination benefits -

Total key management personnel remuneration 4,118,533

In accordance with the PGPA Rule, this information is disaggregated in table 21.

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Table 21 Key management personnel remuneration 2018-19

Short-term benefits

Post-

employment benefits

Other long-term benefits

Termination benefits

Total remun- eration

Name

Position title

Base salary Bonuses

Other benefits and allowances

Super- annuation contributions

Long service leave

Other

long-term benefits

Frances Adamson

Secretary 786,730 - 21,249 109,797 18,666 - - 936,442

Nikki Penelope Williams

Deputy Secretary

345,789 - 23,897 57,695 7,801 - - 435,182

Caroline Millar

Deputy Secretary

78,475 - 7,261 12,381 2,110 - - 100,227

Tony Sheehan

Deputy Secretary

308,431 - - 53,619 6,662 - - 368,712

Richard Maude

Deputy Secretary

427,887 - 23,897 70,666 7,890 - - 530,340

Christopher Langman Deputy Secretary

338,209 - 23,897 48,553 7,801 - - 418,460

Clare Walsh Deputy Secretary

337,543 - 44,922 57,417 7,743 - - 447,625

Paul Wood

Chief Finance Officer 228,928 - 19,310 33,681 5,325 - - 287,244

Murali Venugopal

Chief Finance Officer

24,274 - - 3,654 557 - - 28,485

Daniel Sloper

Chief People Officer

259,460 - 21,615 47,564 6,037 - - 334,676

Suzanne McCourt

Chief Risk Officer

86,813 - 11,544 17,566 1,950 - - 117,873

Angela Robinson

Chief Risk Officer

85,036 - 11,946 13,746 2,539 - - 113,267

Total 3,307,575 - 209,538 526,339 75,081 - - 4,118,533

Note: Some figures are impacted by the duration of service as KMP. Table 19 provides details of the length of service for officers that were classified as KMP. Other benefits and allowances include car allowances, fringe benefits tax expenses and car parking.

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Table 22 Senior executive staff remuneration 2018-19

Short-term benefits

Post- employ- ment benefits

Other long-term benefits

Termin- ation benefits

Total remuneration bands ($)

Senior Exec. Staff

Avg. Base Salary ($)

Avg.

bonuses ($)

Avg. Other Benefits and Allowance ($)

Avg. Super- annuation Contrib-

utions ($)

Avg. Long Service Leave ($)

Avg. Other

Long-term Benefits ($)

Avg.

Termin- ation Benefits

Avg. total remun- eration

Under $220,000 49 81,637 116 13,730 18,773 6,765 0 6,330 126,969

220,001 - 245,000 27 174,224 212 17,903 32,972 9,674 0 0 234,986

245,001 - 270,000 49 190,765 58 22,548 34,824 7,603 0 0 255,797

270,001 - 295,000 21 187,862 136 45,651 34,901 11,016 0 0 279,566

295,001 - 320,000 26 232,466 0 27,848 41,982 7,692 0 0 309,988

320,001 - 345,000 7 242,681 0 35,106 43,655 8,009 0 0 329,451

345,001 - 370,000 5 180,331 0 130,635 39,423 7,580 0 0 357,968

370,001 - 395,000 5 187,145 0 157,450 35,197 3,253 0 0 383,046

395,001 - 420,000 5 202,499 0 129,644 41,559 27,695 0 0 401,397

420,001 - 445,000 3 200,275 0 192,966 40,496 6,902 0 0 440,640

445,001 - 470,000 2 153,531 0 262,629 32,989 9,489 0 0 458,639

470,001 - 495,000 4 169,441 0 275,351 32,143 2,046 0 0 478,981

495,001 - 520,000 4 229,957 0 231,825 36,948 10,874 0 0 509,604

520,001 - 545,000 10 191,730 0 298,706 35,560 6,754 0 0 532,749

545,001 - 570,000 9 186,401 0 325,496 33,784 8,573 0 0 554,253

570,001 - 595,000 4 206,700 0 332,637 37,540 4,810 0 0 581,687

595,001 - 620,000 2 155,505 0 404,675 41,073 8,262 0 0 609,515

620,001 - 645,000 3 195,427 0 391,473 39,359 7,074 0 0 633,333

645,001 - 670,000 3 191,231 0 422,512 33,978 5,966 0 0 653,688

670,001 - 695,000 4 191,155 0 438,442 38,481 6,511 0 0 674,588

695,001 - 720,000 3 197,123 0 466,203 38,424 7,577 0 0 709,328

720,001 - 745,000 4 205,736 0 475,927 38,363 9,306 0 0 729,332

745,001 - 770,000 5 199,028 0 508,835 38,597 8,190 0 0 754,651

770,001 - 795,000 8 197,585 0 542,064 37,556 7,186 0 0 784,391

795,001 - 820,000 3 196,135 0 575,309 35,559 6,298 0 0 813,301

820,001 - 845,000 6 201,983 0 579,189 40,891 7,044 0 0 829,108

845,001 - 870,000 2 215,611 0 601,782 40,182 7,368 0 0 864,942

895,001 - 920,000 1 342,298 0 485,926 51,670 18,599 0 0 898,493

870,001 - 895,000 3 253,020 0 576,049 44,717 6,857 0 0 880,642

920,001 - 945,000 2 267,293 0 596,615 51,665 9,548 0 0 925,121

970,001 - 995,000 1 201,041 0 723,336 35,464 24,095 0 0 983,936

995,001 - 1,020,000 5 232,342 0 729,378 42,682 5,854 0 0 1,010,256

1,045,001 - 1,070,000 1 190,728 0 829,418 36,097 6,268 0 0 1,062,510

1,095,001 - 1,120,000 2 242,225 0 818,259 43,334 7,817 0 0 1,111,634

1,120,001 - 1,145,000 1 240,373 0 837,011 46,748 6,687 0 0 1,130,818

1,145,001 - 1,170,000 2 190,522 0 928,558 36,426 6,475 0 0 1,161,981

1,170,001 - 1,195,000 2 183,073 0 950,721 38,390 7,702 0 0 1,179,887

1,195,001 - 1,220,000 1 206,182 0 949,152 41,910 6,451 0 0 1,203,694

1,245,001 - 1,270,000 2 307,020 0 886,959 48,943 13,144 0 0 1,256,066

1,395,001 - 1,420,000 1 318,758 0 1,022,637 60,199 14,693 0 0 1,416,288

1,695,001 - 1,720,000 1 189,885 0 1,474,979 34,790 6,844 0 0 1,706,498

1,645,001 - 1,670,000 1 252,794 0 1,343,721 52,231 9,801 0 0 1,658,546

1,845,001 - 1,870,000 2 286,815 0 1,516,256 41,674 7,477 0 0 1,852,222

2,020,001 - 2,045,000 1 393,964 0 1,543,748 67,505 18,424 0 0 2,023,641

2,720,001 - 2,745,000 1 326,531 0 2,341,763 55,687 19,618 0 0 2,743,599

2,995,001 - 3,020,000 1 240,411 0 2,723,110 45,807 6,932 0 0 3,016,260

Other short- term benefits include overseas allowances, accommodation and FBT paid on behalf of APS employees posted overseas. Employees posted overseas are remunerated in accordance with DFAT’s ‘overseas conditions of service’ framework. The framework exists to compensate for the differences in locations such as cost of living, hardship and security environment. It also addresses additional costs incurred, such as family medical and educational costs, to ensure posted staff are not disadvantaged.

DFAT provides accommodation for staff and their families for the duration of their posting. While staff and families benefit from this provision, they do not receive direct remuneration for rental costs. Instead, relevant allowances are adjusted to recognise staff contributions for rent and utilities. The value of the rents is determined by the location of posting rather than the work or performance of individual staff.

The number of staff and reported value of total remuneration in table 22 reflects the high property costs and consequent rental costs in many of the 109 locations of our embassies and high commissions, such as Hong Kong, Moscow or New York.

The total remuneration reported also covers the full rental value of properties used by ambassadors and high commissioners. It does not recognise that most official residences have a residential component and a working component, which is used to support Australian Government objectives, including engagement with local political and business representatives and visiting Australian ministers.

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Table 23 Other highly paid staff remuneration 2018-19

Short-term benefits

Post- employ- ment benefits

Other long-term benefits

Termin- ation benefits

Other highly paid staff

Avg. Base Salary

($)

Avg.

Bonuses

($)

Avg. Other Benefits and Allowance

($)

Avg. Super- annuation Contrib-

utions ($)

Avg. Long Service Leave

($)

Avg. Other

Long-term Benefits ($)

Avg.

Termin- ation Benefits

Avg. total remun- eration

220,001 - 245,000 53 98,329 1,384 111,641 17,434 3,476 0 2,089 234,351

245,001 - 270,000 47 99,473 1,697 130,363 18,674 5,740 0 0 258,341

270,001 - 295,000 56 94,826 1,461 165,189 17,573 3,389 0 0 282,437

295,001 - 320,000 53 99,589 1,659 183,757 18,023 3,701 0 0 306,729

320,001 - 345,000 65 106,199 1,570 199,286 18,652 4,459 0 1,043 331,209

345,001 - 370,000 65 102,641 1,592 230,514 19,048 3,286 0 0 357,082

370,001 - 395,000 64 107,925 1,663 250,451 19,919 3,443 0 0 383,401

395,001 - 420,000 53 111,214 1,786 268,700 20,195 3,843 0 0 405,737

420,001 - 445,000 47 115,262 1,702 289,523 20,852 4,528 0 0 431,867

445,001 - 470,000 42 117,799 1,598 312,953 21,384 4,499 0 0 458,233

470,001 - 495,000 28 130,257 1,950 321,765 23,151 4,590 0 0 481,714

495,001 - 520,000 28 125,104 1,638 356,075 22,969 4,260 0 0 510,046

520,001 - 545,000 14 134,153 1,839 365,406 24,489 4,775 0 0 530,662

545,001 - 570,000 28 127,977 2,139 398,880 24,251 4,458 0 0 557,704

570,001 - 595,000 18 139,676 1,916 407,511 25,481 6,676 0 0 581,261

595,001 - 620,000 16 136,361 2,366 441,015 25,140 4,430 0 0 609,312

620,001 - 645,000 7 126,628 2,224 475,858 24,502 4,600 0 0 633,812

645,001 - 670,000 12 137,061 1,640 490,295 26,028 3,745 0 0 658,769

670,001 - 695,000 6 138,229 1,740 514,924 27,760 4,531 0 0 687,184

695,001 - 720,000 4 161,092 1,426 507,390 29,529 5,415 0 0 704,851

720,001 - 745,000 1 150,443 2,851 543,801 22,803 4,404 0 0 724,301

745,001 - 770,000 3 145,246 1,730 580,616 24,478 4,100 0 0 756,169

770,001 - 795,000 4 149,716 1,297 593,482 27,113 5,525 0 0 777,133

795,001 - 820,000 3 157,679 950 613,019 29,239 4,888 0 0 805,776

820,001 - 845,000 1 142,035 2,851 656,869 28,630 4,585 0 0 834,971

845,001 - 870,000 2 108,485 0 727,251 19,830 4,436 0 0 860,002

870,001 - 895,000 2 103,401 1,169 760,570 19,272 3,573 0 0 887,985

895,001 - 920,000 5 116,970 1,973 765,393 20,604 4,039 0 0 908,979

920,001 - 945,000 2 115,397 2,239 783,469 20,267 3,455 0 0 924,827

945,001 - 970,000 2 100,813 1,982 824,798 19,188 1,575 0 0 948,355

970,001 - 995,000 1 142,335 2,851 802,412 26,319 5,271 0 0 979,187

995,001 - 1,020,000 4 129,379 2,482 846,452 25,262 581 0 0 1,004,156

1,020,001 - 1,045,000 3 136,518 2,680 855,938 28,855 3,871 0 0 1,027,861

1,045,001 - 1,070,000 1 124,782 0 904,075 17,115 3,043 0 0 1,049,015

1,070,001 - 1,095,000 1 158,781 2,851 859,960 35,622 20,310 0 0 1,077,524

1,095,001 - 1,120,000 1 137,736 2,851 939,601 28,257 4,472 0 0 1,112,917

Other short-term benefits include overseas allowances, accommodation and FBT paid on behalf of APS employees posted overseas. Employees posted overseas are remunerated in accordance with DFAT’s ‘overseas conditions of service’ framework. The framework exists to compensate for the differences in locations such as cost of living, hardship and security environment. It also addresses additional costs incurred, such as family medical and educational costs, to ensure posted staff are not disadvantaged.

DFAT provides accommodation for staff and their families for the duration of their posting. While staff and families benefit from this provision, they do not receive direct remuneration for rental costs. Instead, relevant allowances are adjusted to recognise staff contributions for rent and utilities. The value of the rents is determined by the location of posting rather than the work or performance of individual staff.

The number of staff and reported value of total remuneration in table 23 reflects the high property costs and consequent rental costs in many of the 109 locations of our embassies and high commissions, such as Hong Kong, Moscow or New York.

The total remuneration reported also covers the full rental value of properties used by ambassadors and high commissioners. It does not recognise that most official residences have a residential component and a working component, which is used to support Australian Government objectives, including engagement with local political and business representatives and visiting Australian ministers.

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Appendix 3: Agency resource statement

Table 24 Department of Foreign Affairs and Trade Resource Statement 2018-19

Actual Available Appropriation for 2018-19

$’000

Payments made 2018-19 $’000

Balance remaining 2018-19 $’000

Ordinary annual services1

Departmental appropriation 1,948,607 1,658,869 (289,738)

Total 1,948,607 1,658,869 (289,738)

Administered expenses

Outcome 1 3,844,072 4,277,552  

Outcome 2 750 159  

Administered capital budget 504 43  

Payments to corporate entities2 135,141 135,141  

Total 3,980,467 4,412,895  

Total ordinary annual services [A] 5,929,074 6,071,764  

Other services  

Departmental non-operating3

Equity injections 168,965 43,998 124,967

Total 168,965 43,998 124,967

Administered non-operating4

Administered assets and liabilities 581,531 -  

Total 581,531 -  

Total other services [B] 750,496 43,998  

Total available annual appropriations [A+B] 6,679,570 6,115,762  

Special appropriations

Special appropriations limited by criteria/ entitlement

Public Governance, Performance and Accountability Act 2013 - s77 Administered

  1,054  

Total special appropriations [C]   1,054  

Special accounts5

Opening balance 357,325    

Appropriation receipts 84,489    

Appropriation receipts from other entities 43,987    

Non-appropriation receipts to Special Accounts 609    

Payment made   148,588  

Total special accounts [D] 486,410 148,588  

Total resourcing [A+B+C+D] 7,165,980 6,265,404  

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Actual Available Appropriation for 2018-19

$’000

Payments made 2018-19 $’000

Balance remaining 2018-19 $’000

Less appropriations drawn from annual or special appropriations above and credited to special accounts

(128,476) -

and/or payments to corporate entities through annual appropriations (135,141) (135,141)

Total net resourcing and payments for DFAT 6,902,363 6,130,263  

1. Appropriation Act (No.1) 2018-19 and Appropriation Act (No. 3) 2018-19. This also includes prior year departmental appropriation and section 74 Retained Revenue Receipts.

2. “Corporate entities’ are corporate Commonwealth entities and Commonwealth companies as defined under the PGPA Act 2013.

3. Appropriation Act (No.2) 2018-19 and Appropriation Act (No.4) 2018-19. This also includes prior year equity injections available for use.

4. Includes appropriations carried forward from previous years to extinguish multiyear agreements.

5. Excludes “Special Public Money” held in accounts like ‘Consular Services Account (CSA), Services for Other Government and Non-agency Bodies (SOG), ‘Services for Other Entities and Trust Moneys accounts (SOETM) or EXPO Dubai 2020.

Table 25 Expenses for Outcome 1

Outcome 1: The advancement of Australia’s international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign, trade and international development policy priorities

Budget*

Actual Expenses Variation

2018-19 $’000

2018-19 $’000

2018-19 $’000

(a) (b) (a - b)

Program 1.1: Foreign Affairs and Trade Operations

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 6,800 6,065 735

Expenses not requiring appropriation in the Budget year2 1,300 8,340 (7,040)

Special appropriations 100 26 74

Other services (Appropriation Act No. 2 and 4) - - -

Departmental expenses -

Departmental appropriation1 695,111 710,534 (15,423)

Expenses not requiring appropriation in the Budget year2 139,037 143,323 (4,286)

Total for program 1.1 842,348 868,288 (25,940)

Program 1.2: Official Development Assistance

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 3,205,265 3,204,354 911

Expenses not requiring appropriation in the Budget year2 500 2,136 (1,636)

Departmental expenses

Departmental appropriation1 255,151 255,151 -

Total for program 1.2 3,460,916 3,461,641 (725)

Program 1.3: Official Development Assistance - Multilateral Replenishments

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 76,670 72,506 4,164

Other services (Appropriation Act No. 2 and 4) - - -

Expenses not requiring appropriation in the Budget year2 - 182,327 (182,327)

Total for Program 1.3 76,670 254,833 (178,163)

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DFAT Annual Report 2018-19

Outcome 1: The advancement of Australia’s international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign, trade and international development policy priorities

Budget*

Actual Expenses Variation

2018-19 $’000

2018-19 $’000

2018-19 $’000

(a) (b) (a - b)

Program 1.4: Payments to International Organisations

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 445,026 373,118 71,908

Total for Program 1.4 445,026 373,118 71,908

Program 1.5: New Colombo Plan - Transforming Regional Relationships

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 50,933 49,379 1,554

Other services (Appropriation Act No. 2 and 4) - - -

Total for Program 1.5 50,933 49,379 1,554

Program 1.6: Public Information Services and Public Diplomacy

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 10,735 10,170 565

Total for Program 1.6 10,735 10,170 565

Programme 1.7: Programmes to Promote Australia’s International Tourism Interests

Administered expenses

Tourism Australia - Corporate Commonwealth Entity 135,141 135,141 -

Ordinary annual services (Appropriation Act Nos. 1 and 3) 19,000 19,000 -

Total for Program 1.7 154,141 154,141 -

Outcome 1 Totals by appropriation type

Administered Expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 3,814,429 3,734,592 79,837

Corporate Commonwealth Entity 135,141 135,141 -

Other services (Appropriation Act No. 2 and 4) - - -

Expenses not requiring appropriation in the Budget year2 1,800 192,803 (191,003)

Special appropriations 100 26 74

Departmental expenses

Departmental appropriation1 950,262 965,685 (15,423)

Expenses not requiring appropriation in the Budget year2 139,037 143,323 (4,286)

Total expenses for Outcome 1 5,040,769 5,171,570 (130,801)

2017-18 2018-19

Average staffing level (number) 3,750 3,702

* Full year budget, including any subsequent adjustments made to the 2018-19 budget through additional estimates and estimated outcome as published in the 2019-20 Budget.

1. Departmental appropriation combines ‘ordinary annual services (Appropriation Act No. 1 & Act No. 3)’ and ‘section 74 revenue receipts’.

2. Expenses not requiring appropriation in the budget year may include depreciation expenses, amortisation expenses, make good expenses, audit fees, concessional costs for loans, finance costs and impairment of financial instruments.

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Table 26 Expenses for Outcome 2

Outcome 2: The protection and welfare of Australians abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services in Australia and overseas

Budget*

Actual Expenses Variation

2018-19 $’000

2018-19 $’000

2018-19 $’000

(a) (b) (a - b)

Program 2.1: Consular Services

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 200 30 170

Expenses not requiring appropriation in the Budget year2 - 63 (63)

Special appropriations 100 8 92

Departmental expenses

Departmental appropriation1 100,128 100,128 -

Total for program 2.1 100,428 100,229 199

Program 2.2: Passport Services

Administered expenses

Expenses not requiring appropriation in the Budget year2 - - -

Special appropriations 810 811 (1)

Departmental expenses

Departmental appropriation1 251,799 251,799 -

Total for program 2.2 252,609 252,610 (1)

Outcome 2 Totals by appropriation type

Administered expenses

Ordinary annual services (Appropriation Act Nos. 1 and 3) 200 30 170

Expenses not requiring appropriation in the Budget year2 - 63 (63)

Special appropriations 910 819 91

Departmental expenses

Departmental appropriation1 351,927 351,927 -

Total expenses for Outcome 2 353,037 352,839 198

2017-18 2018-19

Average staffing level (number) 1,074 1,058

* Full year budget, including any subsequent adjustments made to the 2018-19 budget through additional estimates and estimated outcome as published in the 2019-20 Budget.

1. Departmental appropriation combines ‘ordinary annual services (Appropriation Act No. 1 & Act No. 3)’.

2. Expenses not requiring appropriation in the budget year may include depreciation expenses, amortisation expenses, make good expenses, audit fees, concessional costs for loans, finance costs and impairment of financial instruments.

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Table 27 Expenses for Outcome 3

Outcome 3: A secure Australian presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth’s overseas property estate

Budget*

Actual Expenses Variation

2018-19 $’000

2018-19 $’000

2018-19 $’000

(a) (b) (a - b)

Program 3.1: Foreign Affairs and Trade Security and IT

Departmental expenses

Departmental appropriation1 226,681 226,681 -

Total for program 3.1 226,681 226,681 -

Program 3.2: Overseas Property

Departmental expenses

Expenses not requiring appropriation in the Budget year2 28,803 109,829 (81,026)

Total for program 3.2 28,803 109,829 (81,026)

Outcome 3 Totals by appropriation type

Departmental expenses

Departmental appropriation1 226,681 226,681 -

Expenses not requiring appropriation in the Budget year2 28,803 109,829 (81,026)

Total expenses for Outcome 3 255,484 336,510 (81,026)

2017-18 2018-19

Average staffing level (number) 867 856

* Full year budget, including any subsequent adjustments made to the 2018-19 budget through additional estimates and estimated outcome as published in the 2019-20 Budget.

1. Departmental appropriation combines ‘ordinary annual services (Appropriation Act No. 1 & Act No. 3)’.

2. Expenses not requiring appropriation in the budget year may include depreciation expenses, amortisation expenses, make good expenses, audit fees, concessional costs for loans, finance costs and impairment of financial instruments.

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Appendix 4: Aid program expenditure

Table 28 Total DFAT Official Development Assistance by country and region of benefit, 2018-19 estimated outcome

2018-19 country and region Bilateral

$m

Regional or Global $m

Total $m

Country and Region1 Papua New Guinea 505.3 45.2 550.5

Solomon Islands 146.1 33.3 179.4

Vanuatu 43.9 17.3 61.2

Fiji 35.0 12.4 47.4

Samoa 23.6 7.2 30.8

Kiribati 20.2 6.7 26.9

Tonga 17.6 7.7 25.2

Nauru 21.2 3.4 24.6

North Pacific 2 4.9 4.6 9.5

Tuvalu 6.6 2.2 8.8

Niue and Tokelau 1.8 2.1 3.9

Cook Islands 1.9 1.4 3.3

Pacific Regional 0.1 247.6 247.7

Total Pacific 828.2 391.1 1,219.3

Indonesia 274.6 49.9 324.6

Timor-Leste 73.2 20.1 93.3

Myanmar 41.9 36.7 78.6

Philippines 67.0 11.6 78.6

Cambodia 56.1 20.6 76.7

Vietnam 55.6 16.8 72.4

Laos 24.0 15.4 39.4

Mongolia 7.3 4.4 11.7

Southeast and East Asia Regional 0.0 74.9 74.9

Total Southeast and East Asia 599.8 250.5 850.3

Bangladesh 59.3 28.3 87.6

Afghanistan 80.0 2.1 82.1

Pakistan 39.2 9.8 49.0

Nepal 15.6 12.9 28.4

Sri Lanka 19.8 7.5 27.3

South and West Asia Regional 0.0 22.6 22.6

Bhutan 2.1 5.0 7.1

Maldives 1.8 1.7 3.4

Total South and West Asia 217.7 89.9 307.6

Sub-Saharan Africa 32.8 79.7 112.5

The Middle East and North Africa (includes the Palestinian Territories)3 20.5 146.9 167.4

Latin America and the Caribbean - 7.1 7.1

Other ODA not attributed to particular countries or regions4 - 1,102.4 1,102.4

Total Bilateral and Regional or Global 1,699.1 2,067.6 3,766.7

Departmental (ODA) - - 255.2

Adjustments5 - - -80.1

Grand Total * 1,699.1 2,242.7 3,941.8

*Differences due to rounding

1. Regional totals include amounts attributable to the region but not a specific country.

2. Federated States of Micronesia, Palau and Republic of Marshall Islands.

3. Includes Iraq, Syria and other flows to the region.

4. Includes payments to some UN and Commonwealth organisations and UN peacekeeping operations. The ODA eligible components of cash payments to the International Development Association, Asian Development Fund, Global Environment Facility, Heavily Indebted Poor Countries Initiative, Multilateral Debt Relief Initiative and the Montreal Protocol Multilateral Fund are also included.

5. Adjustments are necessary for reconciliation of ODA accrual to cash basis and include returns from prior years and returns of AIPRD loans. Adjustments are not an appropriation and are not listed in the PBS. 228

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Appendix 5: Workplace health and safety

Health and safety management in the department The department attaches a high priority to the wellbeing of its staff and those who assist us to achieve our objectives. Our operational context makes this a complex undertaking, as we need to manage a wide variety of health and safety risks across our global network. In particular, each of our posts faces different health and safety risks, resulting from the environments and workplaces in which they are located.

To address this, we are committed to building a culture of safety leadership across the organisation that seeks to actively manage risks, improve work practices and foster attitudes that sustain healthy and safe work environments across the global network.

Work health and safety initiatives and outcomes

In July-August 2018, an independent audit assessed the compliance of the department’s WHS management system and reviewed the effectiveness of our due diligence framework. In line with the recommendations in these reports, we implemented a range of measures to strengthen our legal compliance and enhance health and safety practices across the organisation. These include revising how we approach and manage WHS risks at a strategic level. We developed a WHS assurance program, which we will implement in the second half of 2019. The program will provide a clear overview of our WHS risks and enable a consistent approach to WHS risk management across

the department. This will ensure we are better able as an organisation to improve safety outcomes.

Consistent with our focus on the broad range of health and safety issues, we are engaged in a Comcare-sponsored psychosocial survey trial. This builds on the results of an internal baseline study of psychosocial risks completed in 2018. We are using the results to develop and implement policies and procedures to mitigate these risks to our employees.

Reporting requirements under the Work Health and Safety Act 2011 (WHS Act)

Incident notification—34 incidents were notified to Comcare under Part 3 of the Act.

Enforceable undertakings—no directions were given to the department under Part 11, Section 217 of the Act.

Securing compliance—one external investigation was finalised under Part 9 of the Act.

Enforcement measures—no notices were issued under Part 10, Section 191 of the Act.

Rehabilitation management

At our request, in April Comcare undertook a compliance audit of the department’s Rehabilitation Management System. While the audit identified some areas for improvement, overall it confirmed the department was satisfactorily caring for staff injured in the workplace. We are implementing the recommendations in consultation with Comcare. The department’s premium rate remains lower than the Commonwealth average.

Comcare claims accepted 2016-17 2017-18 2018-19

Total number of claims accepted by Comcare 21 15 10

Department premium rate for Comcare coverage as a percentage of total departmental wages and salaries 0.53 0.54 0.47

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Appendix 6: Ecologically sustainable development and environmental performance

During the reporting period, the department ensured that our policy activities and operations contributed to the principles of ecologically sustainable development as required by section 516A of the Environment Protection and Biodiversity Conservation Act 1999 (the EPBC Act). Under our three outcomes we:

• helped develop global frameworks supporting ecologically sustainable development, including shaping a new global treaty for the conservation and sustainable use of marine biological diversity in areas beyond national jurisdiction, and promoting environmental protection in the Antarctic Treaty system

• delivered the development program in accordance with the principles of ecological sustainability in concert with environmental laws of partner governments and relevant multilateral organisations and agreements

- we applied our Environmental and Social Safeguard Policy, which outlines a streamlined approach to managing safeguard risks and seeks to ensure our development program does not cause unacceptable impacts to people and their environment, to all aid investments

- we released the Environmental and Social Safeguard Operational Procedures to guide our policy implementation

• continued to deliver on Australia’s commitment to provide $300 million over four years (2016-17 to 2019-20) to address climate change and disaster resilience in the Pacific

• progressed integration of climate change action and disaster risk reduction across our development program to support partners to build climate resilience and reduce emissions

- we are on track to meet Australia’s commitment to provide $1 billion in climate finance over five years (2015-2020) (including the $300 million commitment to the Pacific)

• led global efforts to conserve coastal ecosystems (mangroves, tidal marshes and seagrasses), which play a significant role in carbon sequestration

- we commenced a new $6 million initiative in the Pacific, as well as blue carbon initiatives in the Indian Ocean region worth almost $2.5 million

- we committed $2 million to the International Coral Reef Initiative and the Global Coral Reef Monitoring Network, which will support coral reef management capacity building and data collection activities for developing countries globally

- we also committed $2 million to support the Australian Institute of Marine Science in the use of innovative technology to enhance capabilities in the Pacific to gather and assess information on coral reef resilience and inform appropriate management

• supported 42 activities, including projects in Myanmar, Laos, Vietnam and India, promoting sustainable water management policies, legislation, regulations, practices and tools

• delivered environmental management services to all properties in the domestic leased estate. The contract with Jones Lang LaSalle (JLL) provides:

- monitoring and reporting on the impact of the department’s business on the environment

- identifying, costing and implementing environmental initiatives

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- preparing information for mandatory reporting of Energy Efficiency in Government Operations (EEGO)

- providing strategic advice on environmental management policy and direction that will benefit the department

• collated energy usage according to the metrics outlined in EEGO Policy and used this information to target initiatives and energy efficiency works.

The EEGO Policy seeks to improve performance through the procurement and management of energy-efficient office buildings and environmentally sound equipment and appliances. As DFAT’s electricity and gas use is separately metered at all of its leased office sites in Australia, it is not required to report central services energy consumption.

The following table shows the department’s domestic energy performance against the EEGO policy intensity target over the past three years:

2016-17 2017-18 2018-19

Tenant light and power 7,500 MJ/person/annum

6,050 5,646 5,547

Other buildings No target MJ/person/annum

541 612 588

• pursued further opportunities to reduce energy consumption at the RG Casey Building, including reduction in on-site server equipment and reduced external lighting

• as part of its strategic accommodation planning, undertook to meet the requirements of the Green Lease

Schedule Policy; that is, for tenancies of greater than 2,000m2 with a lease term greater than two years, accommodation will meet the ‘A’ grade standard of the Building Owners and Managers Association International guidelines and meet a minimum National Australian Built Environment Rating System (NABERS) rating of 4.5 stars.

Site GLS schedule NABERS tenancy rating

RG Casey Building Barton A (gross lease) TBC1

255 London Circuit 2 Nil3 4.5

40 Allara St, Canberra B 5.0

L2, 747 Collins Street, Melbourne B 5.0

44 Sydney Avenue, Barton C2 TBC1

1. Rating yet to be formally completed (expected to be 4.5 or more) 2. Voluntary rating 3. Lease in place before Green Lease Schedule development

• ensured that sustainable development and environmental performance were central considerations in all property-related decisions in the overseas estate. We focus on these principles throughout the property lifecycle, including acquisition, construction, upgrade, maintenance and divestment

• actively pursued best-practice sustainability initiatives in delivering overseas projects, such as energy-efficient lighting, daylight and motion sensors, zoned air-conditioning systems, rainwater harvesting and building management systems

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• ensured that environmental management and monitoring are standard practice throughout the construction phase of a project, involving the ongoing assessment of air quality, noise levels and waste water management

• are developing a renewable energy strategy for the overseas estate, with a focus on the deployment of solar power technology

- it aims to identify sites where the use of renewable energy technology and energy storage will be feasible

- our existing solar panel installations and future plans under the strategy

will contribute to a reduction in our greenhouse gas emissions, site operating costs and improve power reliability

• reduced the amount of domestic and international travel originating in Australia by 800 trips, saving $2.14 million (compared to the previous reporting period). Video conferencing in 2018-19 (the first year statistics have been collected) saw 571 people undertaking 2,592 video conference calls.

All Australian passports issued during the reporting period were printed on paper produced from wood pulp certified as sustainable and ethically sourced.

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Appendix 7: Parliamentary committees of inquiry

This appendix contains information on the department’s engagement with parliamentary committtees of inquiry during the reporting period.

Departmental officers appeared as witnesses before the Joint Standing Committee on Treaties (JSCOT) in relation to ten proposed treaty actions. This figure does not include occasions on which the department’s International Law: Advising and Treaties Section staff attended JSCOT hearings in an advisory or observer capacity.

On 21 June 2018 the Senate Standing Committee on Foreign Affairs, Defence and Trade released its report on Australia’s trade and investment relationships with the countries of Africa. The report can be found at:

https://www.aph.gov.au/ Parliamentary_Business/Committees/ Senate/Foreign_Affairs_Defence_ and_Trade/TradeinvestmentAfrica/ Report.

The department coordinated the government response, which was tabled in parliament on 14 February 2019.

https://www.aph.gov.au/ Parliamentary_Business/Committees/ Senate/Foreign_Affairs_Defence_ and_Trade/TradeinvestmentAfrica/ Government_Response

On 22 August 2018 the Joint Standing Committee on Treaties tabled its report on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The department coordinated the government response to the report which was tabled on 12 April 2019. The report and the government response can be found at:

https://dfat.gov.au/trade/ agreements/in-force/cptpp/ outcomes-documents/Pages/ cptpp-parliamentary-inquiries.aspx

On 18 September 2018 the Senate Foreign Affairs, Defence and Trade References Committee tabled its report on the Proposed Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The department coordinated the government response which was tabled on 12 April 2019. The report and the government response can be found at:

https://dfat.gov.au/trade/ agreements/in-force/cptpp/ outcomes-documents/Pages/ cptpp-parliamentary-inquiries.aspx

On 20 September 2018 the Joint Standing Committee on Trade and Investment Growth tabled its report Trade and the Digital Economy. The report can be found at:

https://www.aph.gov.au/ Parliamentary_Business/Committees/ Joint/Trade_and_Investment_ Growth/Tradeanddigitaleconomy/ Report

In March 2019 the department took over responsibility for coordinating the government response from the Department of Industry, Innovation and Science.

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On 10 October 2018 the Senate Standing Committee on Legal and Constitutional Affairs tabled its report on Customs Amendment (CPTPP Implementation) Bill 2018 [Provisions] and Customs Tariff Amendment (CPTPP Implementation) Bill 2018 [Provisions]. The department coordinated the government response to the report which was tabled on 12 April 2019. The report and the government response can be found at:

https://dfat.gov.au/trade/agreements/ in-force/cptpp/outcomes-documents/ Pages/cptpp-parliamentary-inquiries.aspx

On 14 February 2019 the Senate Foreign Affairs, Defence and Trade References Committee released its report United Nations Sustainable Development Goals (SDG). The report can be found at:

https://www.aph.gov.au/Parliamentary_ Business/Committees/Senate/Foreign_ Affairs_Defence_and_Trade/SDGs/Report

The department is working with other government departments, coordinated by the Department of the Prime Minister and Cabinet, to provide a government response to the report recommendations.

On 14 February 2019 the Trade Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade tabled the report of its inquiry into Access to free trade agreements by small and medium sized enterprises

https://www.aph.gov.au/Parliamentary_ Business/Committees/Joint/ Foreign_Affairs_Defence_and_Trade/ Freetradeagreement/Submissions

The department is coordinating the government response to the inquiry.

On 4 May 2016 the Joint Standing Committee on Foreign Affairs, Defence and Trade released its report on Australia’s trade and investment relationships with countries of the Middle East.

https://www.aph.gov.au/Parliamentary_ Business/Committees/Joint/ Foreign_Affairs_Defence_and_Trade/ Completed_inquiries/44th_Parliament_ completed_inquiries

On 22 March 2019 the government tabled its response to the report, coordinated by the department.

https://www.aph.gov.au/Parliamentary_ Business/Committees/Joint/Foreign_ Affairs_Defence_and_Trade/Middle_ East_trade_and_investment/Report

On 26 March 2019 the Senate Foreign Affairs, Defence and Trade Legislation Committee released the report of its inquiry into the provisions of the Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019. The report can be found at:

https://www.aph.gov.au/Parliamentary_ Business/Committees/Senate/Foreign_ Affairs_Defence_and_Trade/EficBill2019/ Report

The department is coordinating the government response to the report.

In April 2019 the Foreign Affairs and Aid Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade released its interim report Inquiry into Australia’s aid program in the Indo Pacific . The interim report can be found at:

https://www.aph.gov.au/Parliamentary_ Business/Committees/Joint/ Foreign_Affairs_Defence_and_Trade/ Australiasaidprogram/Interim_Report

The committee recommended that the inquiry continue in the next parliament.

On 8 May 2018 the Joint Committee on Public Accounts and Audit tabled in parliament its report into the department’s provision of security to diplomatic missions, Security of Overseas Missions: Inquiry based on Auditor-General’s Report No. 5.

The department responded to the report’s recommendations on 5 April 2019. The response can be found at:

https://www.aph.gov.au/ Parliamentary_Business/Committees/ Joint/Public_Accounts_and_Audit/ Protectoverseasmissions/Government_ Response.

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Appendix 8: Advertising and market research

During 2018-19 the department extended phase IV of the Smartraveller advertising campaign from October to December 2018 (interim campaign). The department also conducted activities to develop the next phase of the Smartraveller Campaign phase V. Further information on this campaign is available at dfat.gov.au and smartraveller.gov.au and in the reports on Australian Government advertising

prepared by the Department of Finance (finance.gov.au).

As required under section 311A of the Commonwealth Electoral Act 1918, following is a list of agencies and organisations contracted by the department (including at overseas posts) to provide advertising and market research services. The list includes payments above $13,800 (GST inclusive).

Table 29 Advertising and market research

Account name Service Provided Program Amount

Advertising agencies

Arnold Furnace Smartraveller campaign interim phase IV - advertising services 2.1 95,684

Australian Federation of Travel Agents Travel advice email advertising and supplier directory placement

2.1 19,563

Market research organisations

Kantar Public (Taylor Nelson Sofres) Smartraveller campaign phase V - market research services (explorative) and

Smartraveller website user testing

2.1 272,140

Hall & Partners Pty Ltd Smartraveller campaign interim phase IV - market research services (evaluation) 2.1 77,391

Insurance Council of Australia Ltd Travel insurance market research 2.1 21,450

Orima Research Pty Ltd Passport client satisfaction survey 1.1 & 2.2 105,724

International Research and Evaluation Services Pty Ltd Market research into aid localisation and social procurement

1.1 15,492

Media advertising organisations

Universal McCann Smartraveller campaign interim phase IV and V - advertising services (media placement) 2.1 382,236

Telstra Corporation White Pages advertising 1.1, 2.1 &

2.2

91,937

Dentsu Mitchell Media Australia Pty Ltd Smartraveller campaign phase IV advertising services (media placement)

2.1 381,607

Universal McCann Recruitment advertising 1.1, 2.1 &

2.2

37,765

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Appendix 9: Purchaser-provider arrangements

Under the Prime Minister’s Directive on the Guidelines for the Management of the Australian Government Presence Overseas, the department is an overseas hub providing a range of services to agencies represented overseas, including management services, security, property, and information and communications technology (ICT).

Under the Service Level Arrangement (SLA) for Management Services 2017-2020, the department provided a catalogue of

services to partner agency Australian-based and locally engaged staff, including financial management, human resources and property and fleet management. Agencies purchasing services under the SLA are listed in column A of the table below.

In 2018-19 the department provided ICT services under an MoU to the agencies listed in column B of the table below in Australia and overseas.

Table 30 Purchaser-provider arrangements

Agency A. Management services B. ICT services

Attorney-General’s Department  

Australian Antarctic Division   

Australian Centre for International Agricultural Research  

Australian Criminal Intelligence Commission  

Australian Electoral Commission   

Australian Federal Police  

Australian Fisheries Management Authority   

Australian Human Rights Commission   

Australian Maritime Safety Authority  

Australian National University  

Australian Nuclear Science and Technology Organisation

 

Australian Public Service Commission   

Australian Radiation Protection and Nuclear Safety Agency   

Australian Research Council   

Australian Taxation Office  

Australian Trade and Investment Commission (Austrade)  

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Agency A. Management services B. ICT services

Australian Transaction Reports and Analysis Centre  

Bureau of Meteorology   

Civil Aviation Safety Authority   

Commonwealth Scientific and Industrial Research Organisation  

Department of Agriculture  

Department of Communications and Arts   

Department of Defence  

Department of Education  

Department of Employment, Skills, Small and Family Business  

Department of Finance   

Department of Health  

Department of Home Affairs  

Department of Human Services   

Department of Industry, Innovation and Science  

Department of Infrastructure, Transport, Cities and Regional Development  

Department of Social Services   

Department of the Environment and Energy  

Department of the Prime Minister and Cabinet  

Department of Veterans’ Affairs  

Export Finance and Insurance Corporation   

Food Standards Australia New Zealand   

Geoscience Australia   

Independent Parliamentary Expenses Authority   

Intellectual Property Australia  

International and Parliamentary Relations Office   

National Archives of Australia   

National Library of Australia  

New Zealand Government   

Office of National Intelligence  

Reserve Bank of Australia  

The Treasury  

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Appendix 10: Contributions

Table 31 lists payments made by the department totalling $373.1 million, consisting of $166 million to 26 international organisations and international treaty secretariats, and $207.1 million to 13 international peacekeeping operations.

Table 31 Contributions to international organisations and peacekeeping operations

2018-19 $

International organisations

ABAC Secretariat 48,709

Antarctic Treaty Secretariat 170,050

APEC Secretariat 523,111

Arms Trade Treaty 39,299

Asia Europe Foundation 56,779

Biological Weapons Convention 50,645

Commission for the Conservation of Antarctic Marine Living Resources 915,917

Commonwealth Secretariat 3,666,859

Comprehensive Nuclear-Test-Ban Treaty 4,239,865

Convention on Certain Conventional Weapons 14,807

Energy Charter Conference 353,090

International Atomic Energy Agency 16,270,365

International Bureau of Permanent Court of Arbitration 35,469

International Centre for the Study of the Preservation and Restoration of Cultural Property 140,525

International Criminal Court 9,345,165

International Tribunal for the Law of the Sea 500,164

International Tribunals for War Crimes 3,787,732

MH17 Dutch National Prosecution Contribution 8,940,000

Organisation for Economic Co-operation and Development 14,441,555

Organisation for the Prohibition of Chemical Weapons 2,385,359

Ottawa Convention 34,671

United Nations - assessed contribution 86,193,599

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DFAT Annual Report 2018-19

2018-19 $

United Nations Educational, Scientific and Cultural Organization 9,942,614

Voluntary Principles on Security and Human Rights 37,791

Wassenaar Arrangement 88,458

World Trade Organization 3,757,655

International organisations total 165,980,249

International peacekeeping operations

UN Disengagement Observer Force 2,187,598

UN Hybrid Operation in Darfur 21,319,340

UN Interim Force in Lebanon 15,055,127

UN Interim Mission in Kosovo 1,057,337

UN Interim Security Force for Abyei 8,826,172

UN Mission for the Referendum in Western Sahara 1,628,964

UN Mission in South Sudan 36,281,564

UN Multidimensional Integrated Stabilization Mission in Mali 34,547,824

UN Multidimensional Integrated Stabilization Mission in the Central African Republic 27,768,228

UN Organization Stabilization Mission in the Democratic Republic of the Congo 35,594,949

UN Peacekeeping Force in Cyprus 926,275

UN Stabilization Mission in Haiti 3,950,288

UN Support Office for African Union Military Observer Mission in Somalia 17,994,151

International peacekeeping operations total 207,137,820

Grand total 373,118,069

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Appendix 11: List of sponsors

The following is a list of sponsors who supported projects or programs undertaken by the department during the year. The list includes sponsorship equivalent to $10,000 and above (GST inclusive).

Table 32 List of sponsors

Sponsor Project/Event Program Amount ($)

Bank of Beirut The Big Aussie BBQ (Beirut) 1.1 19,260

Copyright Agency Australian Writers Week 2019 (Beijing) 1.1 44,000

Code Like a Girl Pty Ltd Code Like a Girl (Canberra) 1.1 16,500

Fringe Club Christmas Cultural Exhibition (Hong Kong) 1.1 45,906

Lockheed Martin Anzac Day 2019 (Houston) 1.1 17,551

Schlumberger Ltd Anzac Day 2019 (Houston) 1.1 12,840

BHP Billiton Anzac Day 2019 (Houston) 1.1 12,840

ANZ Bank Australia Day Reception (London) 1.1 12,529

ANC X Metro Publicity Taste of Australia with Adam Liaw (Manila) 1.1 113,008

Ayala Center Taste of Australia with Adam Liaw (Manila) 1.1 12,340

Mastercard Australian/Israeli Tech Entrepreneurs Night

(New York)

1.1 12,840

Ghella Spa Gday in May 2018 (Rome) 1.1 15,823

Orica Chile S.A. Australia Day 2019 (Santiago De Chile) 1.1 11,169

Posco Australia Day 2019 (Seoul) 1.1 17,966

Rio Tinto Korea Limited Australia Day - Australian Open (Seoul) 1.1 26,349

IFM Investors Australia Day - Australian Open (Seoul) 1.1 17,966

AIP Asset Management Co., Ltd. Australia Day - Australian Open (Seoul) 1.1 17,966

Pepper Savings Bank Australia Day - Australian Open (Seoul) 1.1 26,349

Macquarie Securities Korea Ltd. Australia Day - Australian Open (Seoul) 1.1 35,931

Hotel Lotte Co., Ltd. Australia Day - Australian Open (Seoul) 1.1 17,966

ANZ Korea Australia Day - Australian Open (Seoul) 1.1 17,966

Kia Motors Corporation Australia Day - Australian Open (Seoul) 1.1 17,966

AustCham Australia Day - Australian Open (Seoul) 1.1 11,977

Chevron Korea Inc. Australia Day - Australian Open (Seoul) 1.1 17,966

Maeil Dairies Co., Ltd. Australia Day - Australian Open (Seoul) 1.1 17,966

Swisse Wellness Australia Day - Australian Open (Seoul) 1.1 15,383

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Sponsor Project/Event Program Amount ($)

Woodside Energy Australia Asia Holdings Pte Ltd Australia Day - Australian Open (Seoul) 1.1 11,977

James Cook University Good Science = Great Business 2018 (Singapore) 1.1 48,788

Icon SOC Pte Ltd Good Science = Great Business 2018 (Singapore) 1.1 19,515

Australian Nuclear Science and Technology Organisation

Good Science = Great Business 2018 (Singapore) 1.1 16,101

Australian National University

Good Science = Great Business 2018 (Singapore) 1.1 53,669

RMIT University Good Science = Great Business 2018 (Singapore) 1.1 16,101

University of Queensland Good Science = Great Business 2018 (Singapore) 1.1 16,101

Murdoch Singapore Pte Ltd Good Science = Great Business 2018 (Singapore) 1.1 14,636

Lendlease Asia Holdings Pte Ltd Good Science = Great Business 2018 (Singapore) 1.1 24,394

Curtin Singapore Good Science = Great Business 2018 (Singapore) 1.1 24,394

Telstra International Limited Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Jurlique Japan Australia Day in Spring 2019 (Tokyo) 1.1 12,090

Australia and New Zealand Banking Group Limited Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Commonwealth Bank of Australia Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Macquarie Group Japan Australia Day in Spring 2019 (Tokyo) 1.1 15,113

National Australia Bank Limited Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Toll Express Japan Co., Ltd. Australia Day in Spring 2019 (Tokyo) 1.1 15,113

North West Shelf Liaison Company Pty. Ltd. Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Rio Tinto Japan Limited Australia Day in Spring 2019 (Tokyo) 1.1 15,113

All Nippon Airways Co., Ltd. Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Sekol Farmed Tuna Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Meat & Livestock Australia Australia Day in Spring 2019 (Tokyo) 1.1 15,113

Japan Airlines Australia now (Tokyo) 1.1 73,764

All Nippon Airways Co., Ltd. Australia now (Tokyo) 1.1 53,079

Qantas Airways Australia now (Tokyo) 1.1 38,931

Beautification Organization Wall mural (Tehran) 1.1 12,840

Westpac NZ Limited Trans-Tasman Dinner 2019 (Wellington) 1.1 23,309

Trans-Tasman Business Trans-Tasman Dinner 2019 (Wellington) 1.1 11,188

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Appendix 12: Summary of the overseas network

Following is a summary of the overseas network as at 30 June 2019. The overseas network comprises 120 posts in 83 countries including 11 posts managed by Austrade. The Australian Government has reciprocal arrangements with the Canadian Government regarding the provision of consular services. Australia also performs consular services for Papua New Guinea citizens overseas and for certain Commonwealth countries where Commonwealth countries do not have their own representation. In addition, we have 49 honorary consuls in 44 countries.

More information about our overseas network is available at the department’s website at http://dfat.gov.au/about-us/our-locations/missions/Pages/our-embassies-and-consulates-ov erseas.aspx and at smartraveller.gov.au

Table 33 Australian Government embassies, high commissions, consulates, multilateral missions and representative offices managed by DFAT and Austrade

Location City Type

Afghanistan Kabul Embassy

Argentina Buenos Aires Embassy

Austria Vienna Embassy and Permanent Mission to the

United Nations

Bangladesh Dhaka High Commission

Belgium Brussels Embassy and Mission to the European Union

Brazil Brasilia Embassy

São Paulo Consulate-General*

Brunei Darussalam Bandar Seri Begawan High Commission

Cambodia Phnom Penh Embassy

Canada Ottawa High Commission

Toronto Consulate-General*

Chile Santiago Embassy

China Beijing Embassy

Chengdu Consulate-General

Guangzhou Consulate-General

Hong Kong Consulate-General

Shanghai Consulate-General

Shenyang Consulate-General

Colombia Bogotá½± Embassy

242

DFAT Annual Report 2018-19

Location City Type

Croatia Zagreb Embassy

Cyprus Nicosia High Commission

Denmark Copenhagen Embassy

Egypt Cairo Embassy

Ethiopia Addis Ababa Embassy

Federated States of Micronesia

Pohnpei Embassy

Fiji Suva High Commission

France Paris Embassy and Permanent Delegation to

UNESCO

Paris Delegation to the OECD

Germany Berlin Embassy

Frankfurt Consulate-General*

Ghana Accra High Commission

Greece Athens Embassy

India New Delhi High Commission

Chennai Consulate-General

Kolkata Consulate-General

Mumbai Consulate-General

Indonesia Jakarta Embassy

Jakarta ASEAN Mission

Bali (Denpasar) Consulate-General

Makassar Consulate-General

Surabaya Consulate-General

Iran Tehran Embassy

Iraq Baghdad Embassy

Ireland Dublin Embassy

Israel Tel Aviv Embassy

Italy Rome Embassy and Permanent Mission to the FAO

Milan Consulate-General*

Japan Tokyo Embassy

Fukuoka Consulate-General*

Osaka Consulate-General*

Sapporo Consulate*

Jordan Amman Embassy

Kenya Nairobi High Commission

Kiribati Tarawa High Commission

243

Appendixes

Appendixes

Location City Type

Korea, Republic of Seoul Embassy

Kuwait Kuwait City Embassy

Laos Vientiane Embassy

Lebanon Beirut Embassy

Malaysia Kuala Lumpur High Commission

Malta Malta High Commission

Mauritius Port Louis High Commission

Mexico Mexico City Embassy

Mongolia Ulaanbaatar Embassy

Morocco Rabat Embassy

Myanmar Yangon Embassy

Nauru Nauru High Commission

Nepal Kathmandu Embassy

Netherlands The Hague Embassy

New Caledonia (France) Noumea Consulate-General

New Zealand Wellington High Commission

Auckland Consulate-General*

Nigeria Abuja High Commission

Pakistan Islamabad High Commission

Papua New Guinea Port Moresby High Commission

Lae Consulate-General

Peru Lima Embassy

Philippines Manila Embassy

Poland Warsaw Embassy

Portugal Lisbon Embassy

Qatar Doha Embassy

Russia Moscow Embassy

Samoa Apia High Commission

Saudi Arabia Riyadh Embassy

Serbia Belgrade Embassy

Singapore Singapore High Commission

Solomon Islands Honiara High Commission

South Africa Pretoria High Commission

Spain Madrid Embassy

244

DFAT Annual Report 2018-19

Location City Type

Sri Lanka Colombo High Commission

Sweden Stockholm Embassy

Switzerland Geneva Permanent Mission to the United Nations

Geneva Permanent Mission to the WTO and

Consulate-General

Thailand Bangkok Embassy and Permanent Mission to ESCAP

Phuket Consulate-General

Timor-Leste Dili Embassy

Tonga Nuku’alofa High Commission

Trinidad and Tobago Port of Spain High Commission

Turkey Ankara Embassy

Çanakkale Consulate

Istanbul Consulate-General

Tuvalu Funafuti High Commission

Ukraine Kyiv Embassy

United Arab Emirates Abu Dhabi Embassy

Dubai Consulate-General*

United Kingdom London High Commission

United States of America Washington DC Embassy

Chicago Consulate-General

Honolulu Consulate-General

Houston Consulate-General*

Los Angeles Consulate-General

New York Consulate-General

New York Permanent Mission to the United Nations

San Francisco Consulate-General*

Vanuatu Port Vila High Commission

Vatican City Vatican City Embassy to the Holy See

Vietnam Hanoi Embassy

Ho Chi Minh City Consulate-General

Zimbabwe Harare Embassy

* Consulates managed by Austrade.

In Ramallah, the Australian Government maintains the Australian Representative Office.

In Taipei, the Australian Office represents Australian interests in Taiwan in the absence of formal relations. The office includes staff seconded from the Department of Foreign Affairs and Trade and Austrade.

As part of its pop-up Embassy in Estonia, the Australian Government maintained a physical presence in Tallinn in April-May 2019 and a virtual presence for the rest of the reporting period.

245

Appendixes

Appendixes

Appendix 13: List of corrections

The following errors appeared in DFAT Annual Report 2017-18

Location: Preceding title and page number Printed text Correct text

Opening markets, promoting foreign investment and advancing commercial interests—Overview and analysis, p. 37

As figure 7 shows, prices of the goods and services we trade have increased by just seven per cent over the past decade compared to the 24 per cent increase in overall consumer prices for the same period.

As figure 6 shows, prices of the goods and services we trade have increased by just seven per cent over the past decade compared to the 24 per cent increase in overall consumer prices for the same period.

Enhancing Australia’s influence—Our achievements in 2017-18, p. 70

In 2017-18, 37 scholars completed leadership and mentoring training in Canberra.

In 2017-18, 35 scholars completed leadership and mentoring training in Canberra.

Providing passport and consular services—Overview and analysis, and Table 4 Travel documents issued, p. 95

Take-up rates have exceeded expectations, with the proportion of clients using any kind of online application rising from 57.1 per cent in 2016-17 to 74.3 per cent in 2017-18, peaking at 82.4 per cent in June.

Take-up rates have exceeded expectations, with the proportion of clients using any kind of online application rising from 53.4 per cent in 2016-17 to 61.2 per cent in 2017-18, reaching 66.6 per cent in June.

The same changes apply to the numbers in the 2016-17 and 2017-18 columns of Table 4 in relation to the percentage of applications using online forms.

Providing passport and consular services— Table 5: Consular services provided to Australians, 2016-17 column, p. 97

Total assistance—total number of cases of Australians provided with consular services 231,917

Total assistance—total number of cases of Australians provided with consular services 231,917*

*correction from 2016-17 Annual Report.

A disability inclusive workplace, p. 135 We are also developing practical that staff can

participate fully in the broad range of the department’s work.

We are also developing practical ways that staff with a disability can participate fully in the broad range of the department’s work.

246

DFAT Annual Report 2018-19

Location: Preceding title and page number Printed text Correct text

Appendix 3: Aid program expenditure, p. 237 The text for footnote 5 is missing.

5 Includes returns of prior year appropriations, Australia-Indonesia Partnership for Reconstruction and Development (AIPRD) loan repayments and reconciliation of expenses reported on a ‘cash basis’.

Appendix 5: Ecologically sustainable development and environmental performance—Outcome 3: A secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth’s overseas property estate, p. 241

3. preparing information for DFAT mandatory reporting, including Energy Efficiency in Government Operations (EEGO), National Waste Policy, Australian Packaging Covenant and WaterMAPS.

3. preparing information for DFAT mandatory reporting, including Energy Efficiency in Government Operations (EEGO).

The department fulfilled required whole-of-government reporting on the ICT Sustainability Plan and the Australian Packaging Covenant. The department collated energy usage according to the metrics outlined in EEGO Policy and used this information to target initiatives and energy efficiency works.

The department collated energy usage according to the metrics outlined in EEGO policy and used this information to target initiatives and energy efficiency works.

Appendix 7: Advertising and market research—Table 22 Advertising and market research, p. 245

Dentsu Mitchell Media Australia Pty Ltd Smartraveller and various advertising services 2.1 0

Dentsu Mitchell Media Australia Pty Ltd Smartraveller and various advertising services 2.1 2,783,338

The following errors appeared in DFAT Annual Report 2016-17

Location: Preceding title and page number Printed text Correct text

Providing passport, consular and protocol services— Overview and analysis, p. 102

Our campaign to encourage passport applicants to start their applications online resulted in 63 per cent of applicants completing online forms in June 2017, significantly reducing error rates and processing times.

Our campaign to encourage passport applicants to start their applications online resulted in 53.5 per cent of applicants completing online forms in June 2017, significantly reducing error rates and processing times.

Table 1: Travel documents issued, 2013-14 to 2016-17 (2016-17 column), p. 102

Percentage of applications using online forms 57.1 Percentage of applications using online forms 53.4

247

Appendixes

Appendixes

Appendix 14: List of requirements

PGPA Rule Reference

Part of Report

Description Requirement

17AD(g) Letter of transmittal

17AI p.5 A copy of the letter of transmittal signed and

dated by accountable authority on date final text approved, with statement that the report has been prepared in accordance with section 46 of the Act and any enabling legislation that specifies additional requirements in relation to the annual report.

Mandatory

17AD(h) Aids to access

17AJ(a) p. 6-7 Table of contents. Mandatory

17AJ(b) p. 258-267 Alphabetical index. Mandatory

17AJ(c) p. 256-257 Glossary of abbreviations and acronyms. Mandatory

17AJ(d) p. 248-253 List of requirements. Mandatory

17AJ(e) p. 268 Details of contact officer. Mandatory

17AJ(f) p. 268 Entity’s website address. Mandatory

17AJ(g) p. 268 Electronic address of report. Mandatory

17AD(a) Review by accountable authority

17AD(a) p. 11-13 A review by the accountable authority of the entity. Mandatory

17AD(b) Overview of the entity

17AE(1)(a)(i) p. 14-15 A description of the role and functions of the entity. Mandatory

17AE(1)(a)(ii) p. 17 A description of the organisational structure of the entity. Mandatory

17AE(1)(a)(iii) p. 15 A description of the outcomes and programmes administered by the entity. Mandatory

17AE(1)(a)(iv) p. 15 A description of the purposes of the entity as included in corporate plan. Mandatory

17AE(1)(aa)(i) p. 16 Name of the accountable authority or each member of the accountable authority Mandatory

17AE(1)(aa)(ii) p. 16 Position title of the accountable authority or each member of the accountable authority Mandatory

17AE(1)(aa)(iii) p. 219 Period as the accountable authority or member of the accountable authority within the reporting period

Mandatory

248

DFAT Annual Report 2018-19

PGPA Rule Reference

Part of Report

Description Requirement

17AE(1)(b) p. 16 An outline of the structure of the portfolio of

the entity.

Portfolio departments - mandatory

17AE(2) N/A Where the outcomes and programs administered

by the entity differ from any Portfolio Budget Statement, Portfolio Additional Estimates Statement or other portfolio estimates statement that was prepared for the entity for the period, include details of variation and reasons for change.

If applicable, Mandatory

17AD(c) Report on the Performance of the entity

Annual performance Statements

17AD(c)(i); 16F p. 19-111 Annual performance statement in accordance with paragraph 39(1)(b) of the Act and section 16F of the Rule.

Mandatory

17AD(c)(ii) Report on Financial Performance

17AF(1)(a) p. 112-113 A discussion and analysis of the entity’s financial performance. Mandatory

17AF(1)(b) p. 223-227 A table summarising the total resources and total payments of the entity. Mandatory

17AF(2) N/A If there may be significant changes in the financial

results during or after the previous or current reporting period, information on those changes, including: the cause of any operating loss of the entity; how the entity has responded to the loss and the actions that have been taken in relation to the loss; and any matter or circumstances that it can reasonably be anticipated will have a significant impact on the entity’s future operation or financial results.

If applicable, Mandatory.

17AD(d) Management and Accountability

Corporate Governance

17AG(2)(a) p. 5 Information on compliance with section 10

(fraud systems)

Mandatory

17AG(2)(b)(i) p. 5 A certification by accountable authority that fraud risk assessments and fraud control plans have been prepared.

Mandatory

17AG(2)(b)(ii) p. 5 A certification by accountable authority that appropriate mechanisms for preventing, detecting incidents of, investigating or otherwise dealing with, and recording or reporting fraud that meet the specific needs of the entity are in place.

Mandatory

17AG(2)(b)(iii) p. 5 A certification by accountable authority that all reasonable measures have been taken to deal appropriately with fraud relating to the entity.

Mandatory

17AG(2)(c) p. 116-117 An outline of structures and processes in place for the entity to implement principles and objectives of corporate governance.

Mandatory

249

Appendixes

Appendixes

PGPA Rule Reference

Part of Report

Description Requirement

17AG(2)(d) - (e) N/A A statement of significant issues reported to Minister under paragraph 19(1)(e) of the Act that relates to noncompliance with Finance law and action taken to remedy noncompliance.

If applicable, Mandatory

External Scrutiny

17AG(3) p. 126-128

p. 233-234

Information on the most significant developments in external scrutiny and the entity’s response to the scrutiny.

Mandatory

17AG(3)(a) p. 126-127 Information on judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner that may have a significant effect on the operations of the entity.

If applicable, Mandatory

17AG(3)(b) p. 127 Information on any reports on operations of the entity by the AuditorGeneral (other than report under section 43 of the Act), a Parliamentary Committee, or the Commonwealth Ombudsman.

If applicable, Mandatory

17AG(3)(c) N/A Information on any capability reviews on the entity that were released during the period. If applicable, Mandatory

Management of Human Resources

17AG(4)(a) p. 117-125 An assessment of the entity’s effectiveness in managing and developing employees to achieve entity objectives.

Mandatory

17AG(4)(aa) p. 210-211 Statistics on the entity’s employees on an ongoing and nonongoing basis, including the following: Mandatory

(a) statistics on fulltime employees;

(b) statistics on parttime employees;

(c) statistics on gender

(d) statistics on staff location

17AG(4)(b) p.212-215 Statistics on the entity’s APS employees on an ongoing and nonongoing basis; including the following:

Mandatory

·  Statistics on staffing classification level;

·  Statistics on fulltime employees;

·  Statistics on parttime employees;

·  Statistics on gender;

·  Statistics on staff location;

·  Statistics on employees who identify as Indigenous.

17AG(4)(c) p. 119

p. 216

Information on any enterprise agreements, individual flexibility arrangements, Australian workplace agreements, common law contracts and determinations under subsection 24(1) of the Public Service Act 1999.

Mandatory

250

DFAT Annual Report 2018-19

PGPA Rule Reference

Part of Report

Description Requirement

17AG(4)(c)(i) p. 119

p. 216

Information on the number of SES and nonSES employees covered by agreements etc identified in paragraph 17AG(4)(c).

Mandatory

17AG(4)(c)(ii) p. 217 The salary ranges available for APS employees by classification level. Mandatory

17AG(4)(c)(iii) p. 119 A description of nonsalary benefits provided to employees. Mandatory

17AG(4)(d)(i) p. 217 Information on the number of employees at each classification level who received performance pay. If applicable, Mandatory

17AG(4)(d)(ii) p. 217 Information on aggregate amounts of performance pay at each classification level. If applicable, Mandatory

17AG(4)(d)(iii) p. 217 Information on the average amount of performance payment, and range of such payments, at each classification level.

If applicable, Mandatory

17AG(4)(d)(iv) p. 217 Information on aggregate amount of performance payments. If applicable, Mandatory

Assets Management

17AG(5) p. 128 An assessment of effectiveness of assets

management where asset management is a significant part of the entity’s activities

If applicable, mandatory

Purchasing

17AG(6) p. 128 An assessment of entity performance against the

Commonwealth Procurement Rules.

Mandatory

Consultants

17AG(7)(a) p. 128 A summary statement detailing the number of new contracts engaging consultants entered into during the period; the total actual expenditure on all new consultancy contracts entered into during the period (inclusive of GST); the number of ongoing consultancy contracts that were entered into during a previous reporting period; and the total actual expenditure in the reporting year on the ongoing consultancy contracts (inclusive of GST).

Mandatory

17AG(7)(b) p. 128 A statement that “During [reporting period], [specified number] new consultancy contracts were entered into involving total actual expenditure of $[specified million]. In addition, [specified number] ongoing consultancy contracts were active during the period, involving total actual expenditure of $[specified million] ”.

Mandatory

17AG(7)(c) p. 128 A summary of the policies and procedures for selecting and engaging consultants and the main categories of purposes for which consultants were selected and engaged.

Mandatory

17AG(7)(d) p. 128 A statement that “Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.”

Mandatory

251

Appendixes

Appendixes

PGPA Rule Reference

Part of Report

Description Requirement

Australian National Audit Office Access Clauses

17AG(8) p. 129 If an entity entered into a contract with a value

of more than $100 000 (inclusive of GST) and the contract did not provide the AuditorGeneral with access to the contractor’s premises, the report must include the name of the contractor, purpose and value of the contract, and the reason why a clause allowing access was not included in the contract.

If applicable, Mandatory

Exempt contracts

17AG(9) p. 129 If an entity entered into a contract or there is a

standing offer with a value greater than $10 000 (inclusive of GST) which has been exempted from being published in AusTender because it would disclose exempt matters under the FOI Act, the annual report must include a statement that the contract or standing offer has been exempted, and the value of the contract or standing offer, to the extent that doing so does not disclose the exempt matters.

If applicable, Mandatory

Small business

17AG(10)(a) p. 129 A statement that “[Name of entity] supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.”

Mandatory

17AG(10)(b) p. 129 An outline of the ways in which the procurement practices of the entity support small and medium enterprises.

Mandatory

17AG(10)(c) p. 129 If the entity is considered by the Department administered by the Finance Minister as material in nature—a statement that “[Name of entity] recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.”

If applicable, Mandatory

Financial Statements

17AD(e) p. 131-207 Inclusion of the annual financial statements in accordance with subsection 43(4) of the Act. Mandatory

Executive Remuneration

17AD(da) p. 182

p. 218-222

Information about executive remuneration in accordance with Subdivision C of Division 3A of Part 2-3 of the Rule.

Mandatory

252

DFAT Annual Report 2018-19

PGPA Rule Reference

Part of Report

Description Requirement

17AD(f) Other Mandatory Information

17AH(1)(a)(i) p. 235 If the entity conducted advertising campaigns, a statement that “During [reporting period], the [name of entity] conducted the following advertising campaigns: [name of advertising campaigns undertaken]. Further information on those advertising campaigns is available at [address of entity’s website] and in the reports on Australian Government advertising prepared by the Department of Finance. Those reports are available on the Department of Finance’s website.”

If applicable, Mandatory

17AH(1)(a)(ii) N/A If the entity did not conduct advertising campaigns, a statement to that effect. If applicable, Mandatory

17AH(1)(b) p. 129 A statement that “Information on grants awarded by [name of entity] during [reporting period] is available at [address of entity’s website].”

If applicable, Mandatory

17AH(1)(c) p. 122 Outline of mechanisms of disability

reporting, including reference to website for further information.

Mandatory

17AH(1)(d) p. 127 Website reference to where the entity’s Information Publication Scheme statement pursuant to Part II of FOI Act can be found.

Mandatory

17AH(1)(e) p. 246-247 Correction of material errors in previous annual report If applicable, mandatory

17AH(2) p. 120

p. 125

p. 229

p. 230-232

p. 235

Information required by other legislation Mandatory

253

Appendixes

Appendixes

A mural in central Tehran created by Australian artists Fintan Magee and Guido van Helten, to celebrate 50 years of unbroken diplomatic relations between Australia and Iran. The artwork depicts two craftsmen repairing a traditional Persian rug, celebrating traditional crafts [Guido van Helten]

Reference material

255

Glossary of acronyms, abbreviations and terms

Term Definition

2+2 Meeting of foreign and defence ministers from two countries

AIFFP Australian Infrastructure Financing Facility for the Pacific

ANAO Australian National Audit Office

ANCP Australian NGO Cooperation Program

ANZAC Australia and New Zealand Army Corps

First world war army corps

APEC Asia-Pacific Economic Cooperation

APIS Australian Passport Information Service

ARGONAUT Multinational civil-military cooperation exercise in Cyprus

ASEAN Association of Southeast Asian Nations

ASEM Asia-Europe Meeting

ASNO Australian Safeguards and Non-Proliferation Office

ASX 200 Australia’s lead stock exchange index

AUKMIN Australia - United Kingdom Ministerial Consultations

AUSMIN Australia - United States Ministerial Consultations

CALD Cultural and linguistic diversity

CDPP Commonwealth Director of Public Prosecutions

COP24 24th Conference of the Parties

2018 United Nations Climate Change Conference in Katowice, Poland

CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership

CRT Crisis Response Team

CTBTO Comprehensive Nuclear-Test-Ban Treaty Organization

Da’esh Arabic name of the Islamic State of Iraq and the Levant (ISIL)

DART Disaster Assistance Response Team

E8 Essential Eight Strategies to Mitigate Cyber Incidents

EABC European Australian Business Council

EAS East Asia Summit

EU European Union

FBT Fringe benefits tax

FEMAT Fiji Emergency Medical Assistance Team

Five Eyes Intelligence alliance between Australia, Canada, New Zealand, the United Kingdom and the United States

FSC Financial Sector Commission

FTA Free trade agreement

256

DFAT Annual Report 2018-19

Term Definition

G20 Group of Twenty (19 member countries and the European Union)—forum for international economic cooperation

IA-CEPA Indonesia-Australia Comprehensive Economic Partnership Agreement

ICT Information and communications technology

IAEA International Atomic Energy Agency

IHRA International Holocaust Remembrance Alliance

IOM International Organization for Migration

IORA Indian Ocean Rim Association

ISDS Investor-state dispute settlement

ISIL See Da’esh

ITU International Telecommunications Union

JCPOA Joint Comprehensive Plan of Action

KAFTA Korea-Australia Free Trade Agreement

LGBTI Lesbian, Gay, Bisexual, Transgender and Intersex

NATO North Atlantic Treaty Organization

NCP New Colombo Plan

NGO Non-government organisation

NPDI Non-Proliferation and Disarmament Initiative

NPT Non-Proliferation Treaty

ODA Official Development Assistance

OECD Organisation for Economic Co-operation and Development

OPCW Organisation for the Prohibition of Chemical Weapons

OPO Overseas Property Office and Services

PACER Plus Pacific Agreement on Closer Economic Relations Plus

Pacific Alliance Latin American trade bloc comprising the nations bordering the Pacific (Chile, Colombia, Mexico and Peru)

PBS Portfolio Budget Statements

PIDG Private Infrastructure Development Group

PNG Papua New Guinea

RCEP Regional Comprehensive Economic Partnership

SDGs Sustainable Development Goals

SFO Staff and Family Support Office

UNCLOS United Nations Convention on the Law of the Sea

UNGA United Nations General Assembly

UNHCR United Nations High Commissioner for Refugees

WHO World Health Organization

WIL Women in Leadership

WMD Weapons of mass destruction

WTO World Trade Organization

257

Glossary of acronyms, abbreviations and terms

Reference material

Index

A A4 copy paper, 41 Aboriginal Australians, see Indigenous Australians Abu Dhabi, 109 Abuja, 105, 107 accommodation planning, 231 accountability and management, 116-29 act of grace payments, 128 Adams, Jim, 117 administered program, 113 administrative tribunals, matters before, 126-7 advertising and market research, 235, 247 Afghanistan, 55, 69, 76 AFiniti, 84 Africa, 71, 85-6, 233

mining, 56, 85 posts in, 105, 107, 109 South Sudan, 82 Africa Down Under conference, 85 agency resource statement, 223-7 agriculture and agricultural markets, 41 China, 24 European Union, 51 Japan, 43 Seasonal Worker Programme, 30 Aid Governance Board, 116 aid program, see development assistance program Aid Program Performance Reports, 77 Aid Quality Checks, 77 Alliance 8.7 initiative, 60 aluminium, 23 alumni and alumni engagement, 36-7, 89 Ambae Volcano Disaster, 75 Ambassador for Counter-Terrorism, 55, 56 Ambassador for Cyber Affairs, 57 Ambassador for People Smuggling and Human

Trafficking, 59, 60

Ambassador to the United Nations, 61 annual performance statement, 20-113 ratings, 14 Annual Report

corrections to errors in previous, 246-8 list of requirements, 248-53 Antarctica, 62, 82 anti-bullying, harassment and discrimination, 124-5 anti-dumping measures, 41 APEC, 24, 42 appropriation revenue, see finance APS Code of Conduct investigations, 124 APS Employee Census, 118, 121-4 Argentina, 86 ARGONAUT, 101 arms control, 61 see also non-proliferation and disarmament Arms Trade Treaty, 61 ASEAN, 33, 34, 43 Australia now public diplomacy program, 88 New Colombo Plan, 37 Youth Forum, 48 ASEAN-Australia-New Zealand Free Trade Agreement,

43

ASEAN-Australia Special Summit, 34 ASEAN Coordinating Centre for Humanitarian Assistance, 76 ASEAN Regional Forum, 82 Asia-Europe Meeting, 84 The Asia Foundation, 69 Asialink Business, 37 Asian Development Bank, 35, 68, 72 assets and assets management, 110, 112, 113, 128 Association of Southeast Asian Nations, see ASEAN Athens, 109 Attorney-General’s Department, 83 Audit and Risk Committee, 116, 118, 120 audits, 105, 127

workplace health and safety, 229 AUKMIN, 84 Aus4Transport Infrastructure program, 68 AUSMIN, 23 Austrade, 45, 48, 49

European Australian Business Council mission, 51 information seminars, 52 overseas posts managed, 119 Sustainable Mining Centre of Excellence,

Colombia, 86

Australia-ASEAN Youth Forum, 48 Australia Assists program, 75 Australia Awards, 89 Africa, 71

Bangladesh, 56 Australia-European Union Trade Agreement, 43, 51 Australia-Germany Joint Economic Committee, 51 Australia Group, 61 Australia-Hong Kong Free Trade Agreement, 43 Australia now public diplomacy program, 88 Australia Post, 95 Australia-United Kingdom Ministerial Consultations, 84 Australia-United States Free Trade Agreement, 23 Australia-United States Ministerial Consultations

(AUSMIN), 23

Australian Aid: Friendship Grants, 74 Australian Antarctic Territory, 62 Australian Bureau of Statistics, 48 Australian Cyber Security Centre, 108 Australian Defence Force, see Department of Defence Australian Federal Police, 32, 33, 83 Australian Financial Review, 26 Australian Human Rights Commission, 123, 127 Australian Information Commissioner, 127 Australian Infrastructure Financing Facility for the

Pacific, 30

Australian Institute of Aboriginal and Torres Strait Islander Studies, 120 Australian Institute of Marine Science, 230 Australian National Audit Office (Auditor-General),

116, 129

audits, 105, 127 Australian NGO Cooperation Program, 74 Australian Passport Information Service (APIS), 95 Australian Passport Office, see passports Australian Public Service Code of Conduct

investigations, 124

Australian Public Service Employee Census, 118, 121-4 Australian Safeguards and Non-Proliferation Office, 62, 218

258

DFAT Annual Report 2018-19

Australian Space Agency, 61 Australian Trade and Investment Commission, see Austrade Australian Volunteers Program, 74 Australian Workplace Equality Index, 124 Australia’s International Cyber Engagement Strategy, 57 Australia’s Strategy for Abolition of the Death Penalty, 81 Australia’s Trade through Time website, 48 aviation, 83 awards (recognition), 32, 66, 73

DFAT, 72, 105, 107, 124, 125, 129 awards (scholarships), see scholarships and awards Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy Development Partner,

33

B Bali Process, 59 Bangladesh, 56, 69, 101 New Colombo Plan, 37

Rohingya crisis, 76 banking arrangements, 126 barley, 24 beef, 43, 51 Belgium, 51, 83

investment in Australia, 52 Bhutan, 69 New Colombo Plan, 37 biodiversity, 82 biometrics, 93 Boe Declaration, 27 Brazil, 25, 86 Brexit, 84 Britain, see United Kingdom budget, see finance Building Owners and Management Association

International guidelines, 231 bullying, 124 Burma, see Myanmar business, support for, 42-4, 48, 49-52

China, 23, 24 India, 26 business continuity planning, 118 Business Partnerships Platform, 73 business planning, see plans and planning business sponsors, 36, 240-1 Business Technology Strategy, 106

C Cabinet submissions, 38 Cairns Group, 41 Cambodia, 33, 74 Canada, 43, 51, 60, 86, 242

Rabat embassy, 109 Canberra Fellowships Program, 33 cancelled passports, 93 capacity building (human resource development), 78

Canberra Fellowships Program, 33 cyber security, 57 diplomats, 120 disaster preparedness and relief, 75, 102 Iraqi forces, 85 nuclear safeguards, 62 see also education Capital Management Plan, 128 capital works, 109-10 Caribbean countries, 44, 86 Carnival Australia, 73 CEA Technologies, 44

Challen, Dr Craig, 32 Change of Circumstance reports, 105 Chartered Institute of Procurement and Supply Australia, 129

chemical weapons, 61 children, 70, 74, 97 sexual abuse, 58, 93 see also education

Chile, 44, 86 China, 24, 58 consular services in, 99 investment in Australia, 52

Shenyang, 24, 126 students, 23; New Colombo Plan, 37 trade, 23, 24, 46, 47; FTA, 43, 50, 52 trade tensions with United States, 52 see also Hong Kong Christchurch terror attacks, 27, 57, 99 Citibank, 126 civil society, 73-4 climate change, 31, 66, 74, 82 coal, 24 Colombia, 44, 86 Comcare, 229 Comcover, 105 Commission on Crime Prevention and Criminal Justice,

58

Commonwealth Director of Public Prosecution referrals, 93 Commonwealth Ministerial Action Group, 83 Commonwealth Ombudsman, 127 compensation for detriment caused by defective

administration, 128

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), 32, 43, 52, 233 Comprehensive Nuclear-Test-Ban Treaty, 61, 62 computing, see information and communications

technology; websites and web services conduct, values and ethics, 117, 124 construction projects, 109-10 Consular Emergency Centre, 97, 102 consular services, 97-102, 118, 126

China, 24 India, 25 Consular State of Play report, 100 consultants, 128 contract services, see purchasing Convention on the Law of the Sea, 34, 82 Cook Islands, 27 New Colombo Plan, 36, 37 coral reefs, 230 Coral Sea cable project, 30 corporate governance, 116-17 Corporate Plan, 14, 117 priority functions, 15 see also performance measures correspondence, 38 costs, see finance counter-terrorism, see terrorism court actions, 126 crises, see consular services; humanitarian crises crisis centre, 101 Crisis Preparedness Assurance Team, 101 Crisis Response Team, 32, 101, 102 cultural and linguistic diversity, 123 Current Notes on International Affairs, 90 cyber issues, see information and communications

technology

Cyber Security and ICT Risk Branch, 108 Cyber Security Improvement Program, 105, 108 Cyber Space, 57-58 cyclones (typhoons), 75 Cyprus, 81, 101

259

Index

Reference material

D Da’esh (ISIL), 54, 85 dairy products, 43 Darwin Passport Office, 95 data centres, 107 Davis Station, 62 death penalty, 33, 81, 86 defective administration, compensation for, 128 defence and security, 24-5, 26

foreign interference, 58 Pacific, 27, 30-1 see also non-proliferation and disarmament; North Korea; protective security; terrorism

Defence Export Facility, 44 Democratic People’s Republic of Korea, see North Korea Denmark, 51 Department of Defence (Australian Defence Force), 25,

31, 35, 61, 76 Indo-Pacific Endeavour, 34 UN Protection Force, Cyprus, 81 Department of Finance, 117 Department of Home Affairs, 58 Department of Human Services, 95 Department of Industry, Innovation and Science, 233 Department of the Prime Minister and Cabinet, 12, 38,

57, 120, 234

Department of the Treasury, 68 depreciation and amortisation expenses, 113 deputy secretaries, 14, 218-20 detriment caused by defective administration, 128 Development Assistance Committee, 77 development assistance program, 64-77, 113, 228, 234

Aid Governance Board, 116 corrections to Annual Report 2017-18, 247 The Difference Incubator, 73 digital media, see information and communications

technology; social media; websites and web services Diplomatic Academy, 13, 120 Diplomatic Security Division, 110 disability, people with, 72 corrections to Annual Report 2017-18, 246 staff, 122, 123 disarmament, see non-proliferation and disarmament Disaster Assistance Response Team, 102 Disaster READY program, 75 disasters, see humanitarian crises discrimination, 124-5 see also human rights displaced persons, see refugees Diversity and Inclusion Award, 129 domestic and family violence, 125 domestic property, 110, 231-2 Dublin, 105

E e-commerce, 42, 44, 85 E8 compliance, 108 e-learning courses, 120, 124 earthquakes, 76, 102 East Asia Summit, 23, 34 East Timor, see Timor-Leste ecologically sustainable development, see environment Economic Activity of Foreign-owned Businesses in

Australia, 48

economic and commercial diplomacy, see investment; trade economic growth, 65-74

education, 69, 78 Chinese students hosted, 23 Vanuatu, 67 see also capacity building; scholarships and awards;

staff learning and development effectiveness, transparency and efficiency, 77-8 passport system, 92-4 elections, 66, 89

to international organisations, 83 electricity, see energy Emergency Management Australia, 32, 102 emergency passports, 96 Employee Conduct and Ethics Section, 124 employment, 27, 30, 31

see also staff employment arrangements, DFAT, 119, 216 energy (electricity), 33

DFAT usage, 231 Papua New Guinea, 35 engineers, 102 Enterprise Agreement, 119, 125 environment (ecologically sustainable development),

230

climate change, 31, 66, 74, 82 departmental performance, 230-2, 247 oil spill prevention, 31 Essential Eight Strategies to Mitigate Cyber Incidents

compliance, 108

ethics, values and conduct, 124 Ethics Committee, 117 Europe, 51, 83, 84-5 Germany, 47, 51

posts in, 105, 109 Russia, 58, 82, 83 Ukraine, 62, 82, 83 see also France; United Kingdom European Australian Business Council, 51 European Union (EU), 62, 81

Framework Agreement, 84 free trade agreement, 43; beef exports, 51 ex-gratia payments, 128 exempt contracts, 129 Exercise ARGONAUT, 101 expenses, see finance Export Finance and Insurance Corporation Amendment

(Support for Infrastructure Financing) Bill 2019, 234 Export Finance Australia, 44, 113 exports, see trade external accountability, 126-8

F Facebook, 67, 90, 99, 100 facial biometrics, 93 Fair Work Commission claim, 127 family violence, 125 farming, see agriculture Federal Court actions, 126 females, see women and girls Fiji, 27, 31, 67

green bond, 66 New Colombo Plan, 37 Suva, 109, 110 UN Human Rights Council member, 81 women’s sport, 88 World Bank funding, 72 Fiji Bulikula, 88 Fiji Emergency Medical Assistance Team, 75 finance, 126, 128-9, 132-207, 223-8, 235-41

Comcare premium rate, 229 salaries and remuneration, 217-22; payroll and debt management processes, 126

260

DFAT Annual Report 2018-19

travel savings, 232 see also purchasing financial services, 70 DFAT banking arrangements, 126 financial statements, 132-207 financing of modern slavery and human trafficking, 60 flexible working arrangements, 121 food and nutrition, 67, 76

see also agriculture foreign aid, see development assistance foreign court and tribunal actions, 126 foreign fighters, 55, 85 foreign interference, 58 foreign investment, see investment Foreign Investment Review Board application

assessments, 45

Foreign Policy White Paper, 11, 14, 22, 42, 112, 117 Foreign States Immunities Act 1985, 127 France, 51, 84, 101 investment in Australia, 52

Paris, 109; emergency passports issued, 96 fraud control, 118 passports, 93 free trade, support for, 45 free trade agreements (FTAs), 42-4, 52, 84, 234

China, 43, 50, 52 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), 32, 43, 52, 233

European Union, 43, 51 Pacific Agreement on Closer Economic Relations Plus (PACER Plus), 30 Republic of Korea, 26, 43, 52 United States, 23 freedom of information, 127 French Polynesia, 27

New Colombo Plan, 36, 37 fringe benefits tax (FBT) expenses, 113 FTA Portal, 52 full-time employees, 214 Funafuti, Tuvalu, 27, 107, 109, 126

G G20, 12, 25, 42, 86 meetings at, 23, 24 response to Christchurch terror attack, 57

Gavi, 72 gender equality, see women and girls gender equality fund, 70 Geoscience Australia, 62 Germany, 47, 51 girls, see women and girls Global Coalition to Defeat Da’esh, 85 Global Community Engagement and Resilience Fund,

56

Global Compact for Safe, Orderly and Regular Migration, 60 Global Compact on Refugees, 60 global cooperation, 80-90 Global Counter-Terrorism Forum, 55 Global Fund to Fight AIDS, Tuberculosis and Malaria, 72 Global Polio Eradication Initiative, 67 governance arrangements, DFAT, 116-17 governance reforms, 66, 68, 69, 78 Government Procurement Agreement, 44 grants, 129 Greece (Athens), 109 green bond, 66 Green Lease Schedule Policy, 231 Group of Friends of Comprehensive Nuclear-Test-Ban

Treaty, 61

GSK, 67 Guatemala, 25

H The Hague, 105 Hanoi, 105 harassment, 124-5 Harris, Dr Richard, 32 health, 67, 68, 72, 78

food and nutrition, 67, 76 sexual and reproductive, 70, 75, 81 water and sanitation, 33, 73-4, 230 see also workplace health and safety Hong Kong, 43, 51

investment in Australia, 52 New Colombo Plan, 37 Honiara, 109-10 human resources, see staff human rights, 81, 83, 86 Australian Human Rights Commission, 123, 127 China, 24 Myanmar, 82 see also women and girls human trafficking and people trafficking, 59-60 humanitarian crises and resilience, 75-6, 78, 81, 101-2 Thai cave rescue, 32 Huon Valley Seafood, 50

I ICT, see information and communications technology iDE, 74 immigration, see migration immunisation and vaccines, 67, 72, 78 Impact Investment Exchange Asia’s Women’s

Livelihood Bond series, 70 import duties and tariffs, 23, 25, 26, 43, 234 imports, see trade incidents reported to Comcare, 229 Independent Evaluation Committee, 117 India, 25-6, 34, 69

counter-terrorism, 56 economic relations, 43, 46; WTO disputes, 41 Kolkata, 25, 107, 126 media stories about Australia, 89 New Colombo Plan, 37 India Economic Strategy, 26 Indian Ocean, 230 Indian Ocean Rim Association (IORA), 33, 34 Indigenous Australians, 33, 88, 129

Diplomatic Academy curriculum, 13, 120 New Colombo Plan, 36 passport applications in remote communities, 95 staff, 117, 122, 123, 216 Indigenous Taskforce, 117 Indo-Pacific, 22-38

see also Pacific; Southeast Asia Indo-Pacific Centre for Health Security, 67 Indo-Pacific Endeavour, 34 Indonesia, 25, 34, 247

Bali Process, 59 Comprehensive Economic Partnership Agreement (IA-CEPA), 43 consular services in, 99; smartraveller website

page visits, 100

counter-terrorism, 55 development assistance, 68 humanitarian crises and resilience, 76, 102 New Colombo Plan, 37 Indonesian Red Cross, 102 information and communications technology (cyber

issues), 33, 42, 57-8 e-commerce, 42, 44, 85 East Asia Summit statement, 34 online child sexual abuse, 58 see also social media

261

Index

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information and communications technology (cyber issues), Department, 105, 106-8, 113, 126 delivered to partner agencies, 236-7 passports, 93; online applications, 95 see also websites and web services Information Management and Technology Division,

121

Information Publication Scheme, 127 infrastructure, 23, 35, 68, 72, 78, 234 Pacific, 30; New Guinea, 23, 30, 35, 58 see also information and communications

technology

innovation, 117-18 innovationXchange, 67, 73 internal audit, 105, 116 international agreements, see treaties and other

international agreements international aid, see development assistance program International Atomic Energy Agency, 62 International Commission Against the Death Penalty,

81

International Criminal Court, 82 international crises, see humanitarian crises International Cyber Engagement Strategy, 57 International Disability Alliance, 72 International Energy Agency, 109 International Finance Corporation, 66, 73 international law, 82-3

see also treaties and other international agreements international media visits program, 89 international organisations, 58-62, 72, 113, 238-9

Asian Development Bank, 35, 68, 72 elections to, 83 World Bank, 30, 66, 68, 72 World Trade Organization (WTO), 24, 25, 41, 44 see also United Nations International Organization for Immigration, 59, 76 International Planned Parenthood Federation, 102 International Responsibility to Protect principle, 83 international rules-based order, 34, 41-2, 80-4 international security, see defence and security International Telecommunications Union, 83 internet services, see websites and web services investment and investment markets, 40, 42, 45, 48

Germany, 51 India, 26 Middle East, 234 South Africa, 86 United States, 23, 52 investor state dispute settlement arrangements, 42 Iran, 58, 85

Tehran, 105, 107 Iraq, 54, 85 Ireland (Dublin), 105 ISIL (Da’esh), 54, 85

J Jakarta, 102 Japan, 25, 101 Australia now public diplomacy program, 88

defence and security cooperation, 24-5, 34; North Korea, 35 economic relations, 25, 43, 46, 47, 52 infrastructure investment, 23, 35 New Colombo Plan, 37 Tokyo, 105 Jerusalem, 85 joint parliamentary committees, see parliamentary

committees

Jones Lang LaSalle (JLS), 111, 230-1 Jordan, 76 justice, see law and justice services

K Kabul, 55 Kayo, 88 Keep Australia and Australians safe, 54-62 Kenya (Nairobi), 109 Key Management Personnel, 218-20 King & Wood Mallesons, 36 Kiribati, 27

New Colombo Plan, 37 Tarawa, 110 Kolkata, 25, 107, 126 Korea, see North Korea; Republic of Korea Korea-Australia Free Trade Agreement (KAFTA), 26, 52

L language skills, 13, 120 language spoken at home by employees, 123 Laos, 33, 101 Latin America, 86

free trade agreements, 43, 44 investment, 42 WTO dispute settlement proceedings, 25 law and justice services, 78 passport fraud allegations, 93 Solomon Islands, 66 Vanuatu, 57 see also violence against women and girls Law of the Sea, 34, 82 learning and development, see education; staff

learning and development Lebanon, 76 legislation, 44, 93, 234 Philippines, 68

Vanuatu, 57 LGBTI rights, 81 LGBTI staff, 124 liabilities, 113 LinkedIn, 37 locally engaged staff, 113, 119 location of staff, 215 Lombok, 102 London, 109 London Stock Exchange, 66 lost or stolen passports, 94 lower socio-economic background, NCP students

identifying as, 36

M Madrid Protocol, 82 malaria, 67 Malaysia, 32, 34, 51, 83 Malaysia Airways flight MH17, 83 Maldives, 33

New Colombo Plan, 37 male staff, 121 management and accountability, 116-29 Manila, 105 marine environment, 31, 230 maritime boundaries, 31 maritime security (maritime governance and

international law), 32, 33, 34, 82 South China Sea, 24, 34 Market Insights reports, 52 market research, 235

262

DFAT Annual Report 2018-19

markets and market access, 40-52 Africa, 85-6 China, 23, 24, 50 India, 25-6 Indonesia, 25 Japan, 25 Republic of Korea, 26 United Arab Emirates, 85 United States, 23 Vietnam, 32 see also free trade agreements

Marshall Islands, 27 media coverage, 88, 89 media queries, 90, 100 media releases, 90 media visits program, 89 Medicines for Malaria Venture, 67 meeting briefs, 38 Mekong, 33 memorandums of understanding, 106

counter-terrorism, 55 cyber and digital cooperation, 33 Indo-Pacific infrastructure investment, 23 Pacific Labour Scheme, 31 men staff, 121 mental health and wellbeing, 125 mentoring, 66, 102

corrections to Annual Report 2017-18, 246 DFAT staff, 117 Message Stick, 129 Mexico, 43, 44, 86 MH17 victims, 83 Middle East, 71, 85, 234 posts in, 105, 109 see also South and West Asia migration, 48, 59-60 people smuggling and human trafficking, 59-60 Mindanao, 33, 56 mining and minerals, 23, 24 Africa, 56, 85 Antarctica, 82 Sustainable Mining Centre of Excellence, 86 uranium, 62 ministers, 37-8 modern slavery and human trafficking, 59-60 Monash University, 81 money laundering, 25 Morocco (Rabat), 107, 109 mutual recognition of professional qualifications, 42,

51, 84

Myanmar, 32, 33 education, 69 Rohingya crisis, 32, 76, 82 women and girls, 70, 76

N Nairobi, 109 National Australian Built Environment Rating System (NABERS), 231

National Foundation for Australia-China Relations, 24 National Library Trove database, 90 National Museum of Australia, 88 National Rugby League, 88 national security, see defence and security NATO, 55 natural disasters, see humanitarian crises and resilience Nauru, 37 Nepal, 33, 69, 74

New Colombo Plan, 37

Netherlands, 83 The Hague, 105 investment in Australia, 51

New Colombo Plan (NCP), 36-7 New Zealand, 27, 35, 60, 61, 88 Christchurch terror attacks, 57, 99 development assistance partnerships, 35, 67, 73

free trade agreements, 43 Nigeria (Abuja), 105, 107 Niue, 27

New Colombo Plan, 36, 37 non-government organisations (NGOs), 73-4 non-ongoing employees, 211, 213 non-proliferation and disarmament, 60-2

Iran, 85

North Korea, 35, 61, 62 non-salary benefits, 119 Non-Tariff Barrier Action Plan, 49-50 North Atlantic Treaty Organization, 55 North Korea, 26, 35, 58, 61

nuclear explosions conducted, 62 release of Australian citizen, 97 notarial services, 97 Nuclear Non-proliferation Treaty, 61 nuclear weapons, see non-proliferation and

disarmament

O oceans, see marine environment; maritime security Oceans Dialogue, 32 office accommodation planning, 231 Office of Development Effectiveness, 77, 117 Office of the Australian Information Commissioner,

127

Office of the Pacific, 11, 14, 27, 110 Pacific Maritime Boundaries Section, 31 Official Development Assistance (ODA), 64 country and region, 228

sectors, 71 oil spill prevention, 31 Ombudsman, 127 ‘One Government, One Approach, Zero Tolerance’

statement, 125

ongoing employees, 210, 212 online services, see websites and web services operating result, 112-13 Operations Committee, 116, 118, 120 organisation and structure, 14-17, 108, 116-17 Organisation for Economic Co-operation and

Development (OECD), 42, 109 Development Assistance Committee review of development program, 77 Organisation for the Prohibition of Chemical Weapons,

61

ORIMA Research, 95, 111 outcomes and programs, 15, 224-7 outer space, 61 overseas aid, see development assistance program overseas-born staff, 123 overseas court and tribunal actions, 127 overseas investment, see investment overseas posts, 104-11, 119, 234, 242-5

payroll and debt management processes, 126 staff, 119, 127 women heads of mission/post, 121 see also consular services Overseas Property Office and Services (OPO), 111 overseas travel, see tourism; travel

263

Index

Reference material

P PACE, 126 Pacific, 26-31, 65-7, 81, 120, 230 arms trade, 61

cyber security, 57-8 humanitarian crises and resilience, 75, 81 New Colombo Plan, 36 posts in, 109-10; Funafuti, Tuvalu, 27, 107, 109 see also Fiji; New Zealand; Papua New Guinea;

Solomon Islands; Timor-Leste; Vanuatu Pacific Agreement on Closer Economic Relations Plus (PACER Plus), 30 Pacific Alliance FTA, 44 Pacific Island Food Revolution, 67 Pacific Islands Forum, 27, 81, 107 Pacific Labour Facility, 30 Pacific Labour Scheme, 27, 30, 31 Pacific Maritime Law Exchange, 82 ‘Pacific Reset,’ 27 Pacific Step-up, 11, 26-7, 120

capital works program, 109 performance rating, 23 Pacific Tourism Development Pilot, 73 Pacific Women Shaping Pacific Development

Investment, 66

PacificAus Sports program, 88 Pakistan, 33, 51 New Colombo Plan, 37 Palau, 27, 61

New Colombo Plan, 37 Palestinian Territories, 71 paper, 41, 232 Papua New Guinea, 27, 31, 75, 120

APEC, 42 governance reforms, 66 infrastructure, 23, 30, 35; cyber security, 58 New Colombo Plan, 37 poliovirus outbreak, 67 women and girls, 33, 74, 88 Papua New Guinea Orchids, 88 Paris, 109

emergency passports issued, 96 Paris Agreement on climate change, 82 Parliament, investment statement to, 45 parliamentary committees, 105, 233-4 parliamentary questions on notice, 38 part-time employees, 214 passports, 92-6, 113, 118, 126

corrections to previous Annual Reports, 246, 247 paper used, 232 Passports Legislation Amendment (Overseas Travel by Child Sex Offenders) Act 2017, 93

patrol boats, 44 peacebuilding and peacekeeping, 81 Pearce, Major General Cheryl, 81 people smuggling and human trafficking, 59-60 People’s Republic of China, see China performance measures

Australians overseas: consular, 97, 99, 101; passports, 92, 94, 96 development assistance program, 65, 75, 77 economic, trade and investment agenda, 41, 42,

45, 49

global cooperation, 80, 84, 86, 87, 89 Indo-Pacific, 22, 36, 37 overseas presence, 104, 106, 108-11 security, 54, 57, 59, 60 Performance of Australian Aid report, 77 performance report, 20-113

ratings, 14

Performance, Risk Resourcing Committee, 116, 117, 118, 120, 218 Peru, 43, 44, 86 Philippines, 33, 51

consular services in, 99 health, 68, 75 Manila, 105 Mindanao, 33, 56 Super Typhoon Mangkhut, 75 Philippines Red Cross, 75 plain packaging measure, 41 plans and planning, 117, 118

asset management, 110 capital management, 128 fraud control, 118 office accommodation, 231 reconciliation action, 13, 122 police training and development, 57 poliovirus outbreak, 67 population policy, 48 Port Vila, 110 portfolio, 16 Portfolio Budget Statements (PBS), 117

outcomes and programs, 15 Post-in-a-Box communication capability, 107 poverty reduction, 65-74 Preventing Sexual Exploitation, Abuse and Harassment

Policy, 125

prime ministerial travel, 38 priority passports, 92, 94 privacy, 127 Private Infrastructure Development Group, 72 private sector development, 66 private sector partnerships, 73 procurement, see purchasing Productivity and Automation Centre for Excellence,

126

professional qualifications, recognition of, 42, 51, 84 programs and outcomes, 15, 224-7 Promote a stable and prosperous Indo-Pacific, 22-38 property management, 109-11, 230-1 protective security, 104-8, 234

passports, 96 protocol services, 86-7 corrections to Annual Report 2016-17, 247 Provide a secure and effective overseas presence,

104-11

public diplomacy, 87-9 see also scholarships and awards Public Sector Innovation Award, 107 pulses, 41 purchaser-provider arrangements, 236-7 purchasing (procurement), 113, 128-9, 235-7

rapid application delivery model, 106-7 WTO Agreement, 44 purpose, 14 Pursue our economic, trade and investment agenda,

40-52

Q qualifications, recognition of, 42, 51, 84 questions on notice, 38

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DFAT Annual Report 2018-19

R RG Casey Building, 231 Rabat, 107, 109 Raisina Dialogue, 25 Rakhine State, 32 rapid application delivery model, 106-7 Reconciliation Action Plan, 13, 122 recruitment, 120, 122 Red Cross, 75, 102 reDESIGN initiative, 126 reefs, 230 refugees and internally displaced people, 60, 76

Rohingya, 32, 76 refused passports, 93 regional Australia, NCP students from, 36 regional collaboration, 34 Regional Comprehensive Economic Partnership (RCEP),

43

regional security, see defence and security rehabilitation management, 229 religion, 33 remuneration, 217-22

payroll and debt management processes, 126 renewable energy, 232 Rennell Island, 31 reportable sex offenders, 93 reproductive health, 70, 75, 81 Republic of Korea, 26, 42, 46

free trade agreements, 26, 43, 52 New Colombo Plan, 37 Republic of the Marshall Islands, 27 requests for trade and investment data, 48 revenue, see finance risk management, 118 security, 105 Riyadh, 105 roads, 68, 78 Rohingya crisis, 32, 76 rugby league, 88 rules-based international order, 34, 41-2, 80-4 Russia, 58, 82, 83

S salaries and remuneration, 217-22 payroll and debt management processes, 126 Samoa, 66, 67, 84

New Colombo Plan, 36, 37 sanctions, 35, 56, 82 satisfaction

consular services, 97 passport clients, 94-6 property services, 111 protocol services delivery, 86-7 Saudi Arabia (Riyadh), 105 scholarships and awards

Australia Awards, 56, 71, 89 New Colombo Plan, 36-7 seafood, 50 Seasonal Worker Programme, 30 Secretary, 14, 119, 125, 218-20 committees chaired, 116 launches, 117, 122, 123, 124, 125 review of year, 11-13 strategic dialogues with business leaders, 48 security, see defence and security; protective security Security Clearance Management System, 105 Security Enhancements Program, 105, 108 Security Framework, 104-5 Senior Executive Service (SES) staff, 119, 221 women, 121

senior management committees, 116-17 Service Level Arrangement, 236 services, trade in, 44 Services Export Action Plan, 51

sexual abuse of children, 58, 93 sexual and reproductive health, 70, 75, 81 sexual equality, see women and girls sexual exploitation, abuse and harassment policy, 125 Shanghai trade expo, 23 Shenyang, 24, 126 Singapore, 31, 34, 51

investment in Australia, 52 post in, 105 skilled migration, 48 slavery and human trafficking, 59-60 small business, 129 Smartraveller services, 99-100 social media and streaming services, 67, 90 Australia now posts, 88 Kayo, 88 LinkedIn NCP alumni group, 37 prevention of terrorist and violent extremism

content, 12, 56, 57

travel advice, 99.100 soft power, 87-9 see also scholarships and awards Solomon Islands, 27, 66 gender equality and women’s empowerment, 73 Honiara, 109-10 humanitarian crises and resilience, 31, 75, 101 internet, 30 New Colombo Plan, 37 water supply, 74 SolTuna, 73 Songlines exhibition, 88 South Africa, 86 South America, see Latin America South and West Asia, 33 development assistance program, 69 mutual recognition agreements, 51 New Colombo Plan, 37 posts in, 105 terrorism and violent extremism, 33, 54, 55, 85, 99 see also Bangladesh; India; Sri Lanka; Syria South Asia Regional Infrastructure Connectivity, 35 South Asia Trade Facilitation Program, 69 South China Sea, 24, 34 South Korea, see Republic of Korea South Pacific, see Pacific South Sudan, 82 Southeast Asia, 31-3 development assistance program, 68-9, 74 Economic Governance and Infrastructure Initiative,

35

maritime security package, 34 mutual recognition agreements, 51 New Colombo Plan, 37 posts in, 102, 105 terrorism and violence extremism, 33, 55, 56, 99 travel advice, 99; Smartraveller website page

visitors, 100

see also ASEAN; Indonesia; Myanmar; Singapore; Timor-Leste space security, 61 sponsors, 36, 240-1 sport, 88 Sri Lanka, 34, 51

New Colombo Plan, 37 terrorist attacks, 33, 55, 99 travel advice, 99; Smartraveller website page visitors, 100

staff, 117, 119-25, 210-22 court or tribunal actions, 127 expenses, 113

265

Index

Reference material

Staff and Family Support Office, 125 staff learning and development, 117, 118 cyber skills, 108 Diplomatic Academy, 13, 120

disability confidence, 122 mental health, 125 security awareness, 105, 108 staff recruitment, 120, 122 steel, 23 step-up in Pacific and Timor-Leste, see Pacific Step-up stolen or lost passports, 94 Strategic Policy Committee, 106, 116 Strategic Policy, Contestability and Futures Branch, 118 submissions, 38 sugar, 25, 41 Sulawesi, 76 Super Typhoon Mangkhut, 75 Supply Nation, 129 Support Australians overseas, 92-102 Surabaya, 102 Sustainable Development Goals, 65, 234 Sustainable Mining Centre of Excellence, 86 Suva, 109, 110 Sweden, 51 Syria, 54, 82, 85 chemical weapons, 61 humanitarian crises and resilience, 76 repatriation of unaccompanied Australian children,

97

T Talking to the Australian Public about Globalisation, 48 Tarawa, 110 tariffs and import duties, 23, 25, 26, 43, 234 taxation and tax systems, 66, 68 Tehran, 105, 107 telecommunications cables, 30 tenders, see purchasing terrorism and violent extremism, 54-7, 85

Christchurch, 27, 57, 99 Sri Lanka, 33, 55, 99 Thailand, 32-3, 34, 47, 101 cave rescue, 32

consular services in, 99; smartraveller website page visits, 100 timeliness passport processing, 93

travel advice, 99 Timor-Leste, 30, 31, 33, 62 education and training, 69, 89, 120; New Colombo Plan, 37

humanitarian crises and resilience, 75, 101 tobacco plain packaging measure, 41 Tokyo, 105 Tonga, 67, 84

New Colombo Plan, 37 Torres Strait Islanders, see Indigenous Australians tourism, 73

for child sex, 93 see also consular services; passports trade, 34, 40-52, 78 corrections to Annual Report 2017-18, 246

parliamentary committees of inquiry, 233, 234 South Asia Trade Facilitation Program, 69 see also investment; markets and market access trade disputes, 25, 41 trade finance, 44, 234 trade in services, 44, 51 trafficking in humans and people smuggling, 59-60 training, see capacity building; education; staff learning

and development

Transform22 program, 126

transparency, 77-8 transport infrastructure, 68, 69, 78 travel, 38, 232 international media visits program, 89

see also consular services; passports; tourism travel advice, 99-100 Treasury, 68 treaties and other international agreements, 82

climate change, 82 investment, 42 Law of the Sea, 34, 82 mutual recognition of professional qualifications,

51, 84

nuclear weapons and safeguards, 61, 62 wine, 84 WTO agreements, 41 tribunals, matters before, 126-7 Trinidad and Tobago, 44 tropical cyclones (typhoons), 75 Trove database, 90 tsunami, 75 Turkey, 85, 101 Tuvalu, 37 Funafuti, 27, 107, 109, 126 Twitter, 90, 99, 100 2+2 consultations, 24-5, 26 typhoons, 75

U Ukraine, 62, 82, 83 Umbrella Group, 82 UN Women, 81 United Arab Emirates, 85 Abu Dhabi, 109 United Kingdom, 51, 60, 84

investment in Australia, 52 London, 109 nuclear cooperation agreement, 62 United Nations, 83 United Nations Children’s Fund (UNICEF), 67 United Nations Convention on the Law of the Sea, 34,

82

United Nations Disarmament Commission, 61 United Nations Financial Sector Commission, 60 United Nations General Assembly, 60, 61 United Nations Group of Governmental Experts on

Developments in the Field of Information and Communications in the Context of International Security, 58 United Nations High Commissioner for Refugees, 59 United Nations Human Rights Council, 81 United Nations Population Fund, 75, 102 United Nations Security Council, 81 sanctions, 35, 82 United States, 23, 34, 51, 60 consular services in, 91; smartraveller website

page visits, 100

investment, 23, 52; in infrastructure, 23, 35 Middle East, 85 North Korea, 35 trade, 46, 47; agricultural policies, 41, 51 trade tensions with China, 52 Washington, 109 university students, 36-7 uranium, 62 Uruguay, 42

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DFAT Annual Report 2018-19

V vaccines and immunisation, 67, 72, 78 values, conduct and ethics, 117, 124 Vanuatu, 27, 31, 57, 67, 84, 101

Ambae Volcano disaster, 75 education, 67; New Colombo Plan, 37 gender equality and women’s empowerment, 70 governance reforms, 66 Port Vila, 110 tourism businesses, 73 Varghese, Peter, 26 Venezuela, 86 video conferencing, 232 Vietnam, 32, 33, 34, 82

Hanoi, 105 road transport, 68 Smartraveller web page visits, 100 violence against women and girls, 78, 81 Afghanistan, 69 Rohingya, 76 Vanuatu, 70 volcano evacuation, 75 volunteers, 74

W Washington, 109 water and sanitation, 33, 73-4, 230 weapons, 61

see also non-proliferation and disarmament websites and web services Australia’s Trade through Time, 48

Coral Sea cable project, 30 Disability Portal for staff, 122 FTA portal, 52 Market Insights reports, 52 passport applications, 95 Smartraveller, 99-100 Trade Barriers Gateway, 49-50 video conferencing, 232 see also social media West Asia, see South and West Asia White Paper, 11, 14, 22, 42, 112, 117 wine, 41, 84 women and girls (gender equality), 34, 66, 69-70, 74,

78, 81, 86

Canberra Fellowships Program, 33 Indigenous Australians, 88 Indonesia, 55 Papua New Guinea, 33, 74, 88 Philippines, 75 refugees and internally displace, 76 Solomon Islands, 73 see also violence against women and girls Women Peace and Humanitarian Fund, 81 women staff, 121-2 workforce, see staff Working Strategy 2018-2022, 120 workplace diversity, 121-5 workplace health and safety, 120, 124-5, 229

see also protective security Workplace Relations Committee, 117 World Bank, 30, 66, 68, 72 World Food Programme, 76 World Health Organization, 67 World Trade Organization (WTO), 24, 25, 41, 44, 86

X Xinjiang, 24

Y young people, 48, 83, 88 YuMi Tourism Partners, 73

Z Zimbabwe, 86

267

Index

Reference material

ISSN 1032-2019 (print) ISSN 1839-5147 (online) ISBN 978-1-74322-499-1 (book, softcover) ISBN 978-1-74322-500-4 (pdf) ISBN 978-1-74322-501-1 (web page)

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Acknowledgements Executive Editor Indra McCormick

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Indexer Michael Harrington

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DFAT Annual Report 2018-19