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The objective of the Foreign Affairs and Trade Portfolio is to make Australia stronger, safer and more prosperous by promoting and protecting its interests internationally and contributing to global stability and economic growth, particularly in the Indo-Pacific region
The objective of the Foreign Affairs and Trade portfolio is to make Australia stronger, safer and more prosperous by promoting and protecting its interests internationally and contributing to global stability and economic growth, particularly in the Indo-Pacific region.
This audit would examine the Export Finance and Insurance Corporation’s (EFIC’s) provision of financial solutions to Australian exporters.
EFIC was established to provide financial solutions to Australian export businesses that require assistance when commercial financing is not available. The financial solutions provided can include loans, insurance, guarantees and bonds. As a self-funded corporate Commonwealth entity, EFIC is governed under the provisions of the Public Governance, Performance and Accountability Act 2013 and the Export Finance and Insurance Corporation Act 1991. As at 30 June 2016, EFIC had $3.41 billion in assets and $2.96 billion of liabilities. EFIC’s annual profit for 2015–16 was $16.5 million against a budgeted profit of $19.8 million.
This audit would examine the Australian Trade and Investment Commission’s (Austrade’s) response to increased government priorities for the promotion, attraction and facilitation of productive foreign direct investment into Australia.
Austrade is responsible for identifying international business opportunities for Australian businesses and institutions in order to expand trade and bilateral relations, and facilitating business relationships between Australian suppliers and international investors and companies. In 2016, the Australian Trade Commission Act 1985 was amended to reflect the increased emphasis the Government is placing on attracting and facilitating foreign direct investment, and the role that Austrade plays in achieving policy outcomes.
This audit would examine the Department of Foreign Affairs and Trade’s (DFAT’s) implementation of the Strategy for Australia’s Aid Investments in Private Sector Development.
In June 2014, the Australian Government announced a new aid policy focusing on the achievement of two development outcomes: strengthening private sector development, and enabling human development. The goal of the private sector development outcome is to grow the size and inclusiveness of the private sector in Australia’s partner countries. The Government subsequently released the Strategy for Australia’s Aid Investments in Private Sector Development in October 2015. Under this strategy, Australia’s private sector development investments are to target three strategic objectives: building better business and investment environments; supporting growth in specific markets; and maximising the development impact of regional businesses.
DFAT is now required to ensure that all new investments made by the Australian Government explore innovative approaches to promote private sector growth or engage the private sector. DFAT aims to achieve this through:
collaboration—whereby DFAT provides convening, brokering and influencing services to assist overseas business; and
partnering—whereby DFAT establishes more formal relationships with private sector parties via memorandums of understanding, funding facilities or cost- and risk-sharing arrangements.
This audit would examine whether the administration of assistance provided under the Northern Australia Infrastructure Facility (NAIF) is protecting the Australian Government’s financial interests and providing value for money.
The 2015–16 Budget announced that a $5 billion Northern Australia Infrastructure Facility would be established to provide concessional loans for the construction of major infrastructure such as ports, roads, rail, pipelines, and electricity and water supply. It was intended that the facility would increase private sector investment in infrastructure in northern Australia. Key elements of the governance arrangements are as follows:
The NAIF Board is responsible for all decision-making in relation to concessional finance. It is supported by the Export Finance and Insurance Corporation for origination, execution and administration functions via a service level agreement.
Concessional financial assistance to be funded by a special appropriation, attributable to the Department of Industry, Innovation and Science as the accountable authority.
A master facility agreement to provide a contractual arrangement between the Commonwealth (represented by the Department of Industry, Innovation and Science), the NAIF and the states, for the provision of the concessional financial assistance. This is to enable each of the states to provide concessional finance (such as loans or guarantees) to the project proponents as a pass-through arrangement, and to collect repayments for onforwarding to the Commonwealth.
In October 2016, the Minister for Resources and Northern Australia announced that more than 70 enquiries about project funding had been received, with one project undertaking due diligence and another 13 working towards a formal investment proposal. The minister stated that these projects represented a total investment of over $10 billion, but that not all would receive assistance and other projects proposals were still encouraged.
The objective of the audit is to examine the implementation of the annual performance statements requirements under the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) by selected entities in 2016–17.