2021-22 Annual Report (text version)
The Queensland Treasury Corporation Annual Report 2021-22 provides details of Queensland Treasury Corporation’s (QTC’s) achievements, outlook, performance and financial position for the 2021-22 financial year.
19 August 2022
The Honourable Cameron Dick
Treasurer and Minister for Trade and Investment
GPO Box 611
Brisbane QLD 4001
Dear Treasurer and Minister for Trade and Investment
I am pleased to present the Annual Report 2021–22 and financial statements for Queensland Treasury Corporation.
I certify that this Annual Report complies with:
- the prescribed requirements of the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2019, and
- the detailed requirements set out in the Annual Report requirements for Queensland Government agencies.
A checklist outlining the annual reporting requirements can be found at page 68 of this Annual Report.
Queensland Treasury Corporation (QTC) has a statutory responsibility to advance the financial position and development of the State. Established under the Queensland Treasury Corporation Act 1988, QTC is a corporation sole, reporting through the Under Treasurer to the Treasurer and the Queensland Parliament.
Protecting and advancing Queensland’s financial interests
To deliver optimal financial outcomes through sound funding and financial risk management
2021-25 Strategic Goals
1. Sustainable funding
2. State and client value
3. Organisational excellence
We build strong partnerships with our clients to deliver simple and well-designed solutions that achieve quality outcomes for Queensland.
We work as one team, taking joint responsibility for achieving our vision and collaborating to achieve outstanding performance.
We aim for excellence using flexible and agile processes to continuously improve.
We show respect by recognising contributions, welcoming ideas, acting with honesty, being inclusive and embracing diversity.
We inspire trust and confidence in our colleagues, clients, stakeholders and investors by upholding strong professional and ethical standards.
QTC is the central financing authority for the Queensland Government and provides financial resources and services for the State. We manage the State’s funding program in the global capital markets to deliver sustainable and cost-effective borrowings for the Queensland Government departments and agencies, local governments, and other related entities (our clients).
With a statutory role to advance the financial interests and development of the State, we work in partnership with Queensland Treasury and our clients to solve complex commercial, policy and economic issues. We help to deliver innovative, long-term solutions that contribute to the growth of Queensland’s economy.
We protect Queensland’s financial interests and deliver better financial outcomes by centralising the management of our clients’ borrowings, cash investments, and financial risks. We play an integral role in managing the State’s finances, working closely with our clients on their balance sheet management and helping to identify opportunities to minimise costs and risks.
At QTC, we are committed to protecting and advancing the financial interests of Queensland.
On behalf of the Queensland Treasury Corporation Capital Markets Board, I am pleased to present Queensland Treasury Corporation’s Annual Report for 2021–22, following my appointment as Chair on 1 July 2022.
It is a privilege to be appointed Chair of QTC, an organisation with a legacy of sound financial stewardship for the State of Queensland. I am fortunate that, through my former role as Chief Executive of QIC, I have had the opportunity to work with QTC’s Chief Executive and observe the organisation’s strong relationships with, and extensive knowledge of, both the Queensland Government and global financial markets.
In the year under review, QTC raised $15.3 billion to fund the State’s borrowing program, and delivered solutions for clients that helped manage their financial risks, created economic benefits and enhanced the State’s fiscal position. QTC also delivered $464.2 million of returns to Queensland Government stakeholders through debt management and Cash Fund returns.
With its dedicated leadership team and high-performing workforce, I am confident that QTC will continue to provide the funding and financial risk management advice to support the key financial decisions that underpin Queensland’s economic recovery and future growth.
As I begin my Chairmanship with QTC, I would also like to extend my sincere gratitude to former Chair, Gerard Bradley AO, for his leadership and service to QTC and the State of Queensland.
In the coming year, the Board will be committed to guiding QTC to deliver its strategic objectives as the State’s central financing authority. I look forward to working with my fellow Board members and the Executive Leadership Team to set a continued successful path for QTC in the future.
D J FRAWLEY
19 August 2022
In 2021–22, QTC faced challenging market conditions with central banks increasing interest rates to combat elevated inflation and significant yield movements. This was coupled with extreme volatility in the bond markets that was higher than during the European Sovereign Debt Crisis and on-par with the outset of the COVID-19 shock.
Despite this backdrop, QTC’s established reputation as a leading semi-government issuer supported its ability to achieve $15.3 billion issuance during the year. QTC delivered $464.2 million of returns to its Queensland Government stakeholders, including a $404.6 million interest rate reduction through debt management and $59.6 million in Cash Fund returns.
This year, QTC continued its ongoing alignment with Queensland Treasury to support the delivery of the Government’s priorities and help identify opportunities for our clients to minimise their costs and risks.
QTC’s ability to navigate the complex market environment, and protect and advance Queensland’s financial interests, was underpinned by its strong operational performance. QTC has continued to be recognised in the industry and won a national ‘2022 5-Star Employer of Choice’ award for its third consecutive year from Human Resources Director.
At the close of the 2021–22 financial year, we welcomed Damien Frawley as the new Chair of the QTC Capital Markets Board. His appointment followed the retirement of former QTC Board Chair, Gerard Bradley AO on 30 June 2022. QTC extended its sincere thanks to Mr Bradley for his significant contribution and service to QTC from 2012–2022.
Funding the State
QTC continued to demonstrate its reputation as a highly regarded bond issuer through the execution of term debt issuance in what has been a volatile year in bond markets. QTC’s liquidity position remained strong over the year with all debt servicing obligations met as required. The strength of QTC’s liquidity was recognised by the credit rating agencies when they assessed the State’s credit position during the year.
In 2021–22, QTC completed its borrowing program of $14.3 billion, ahead of schedule, and raised an additional $1.0 billion of funding. The issuance was executed through $6.5 billion in syndicated deals, $3.5 billion in seven tenders and $5.3 billion via reverse enquiry. This included the establishment of three new bond lines, including a $3.0 billion 1.50% 2 March 2032 CBI certified Green Bond, a $1.5 billion 2.00% 22 August 2033 benchmark bond, and a $2.0 billion 3m BBSW+1bp 3 March 2026 floating rate note.
The Queensland Government and QTC continued to provide transparent and regular updates to the market on Queensland’s fiscal position and borrowing program throughout the year. QTC’s borrowing program was reduced by $3.1 billion to $14.3 billion following the Queensland 2021–22 Budget Update released on 16 December 2021. The reduction was a result of lower client borrowings and general government revenue uplifts.
Following the Queensland 2022–23 State Budget, released on 21 June 2022, QTC estimates it will borrow $14.4 billion of term debt in the 2022–23 financial year.
QTC worked closely with its stakeholders and the Queensland Government to deliver initiatives that support environmental, social and governance (ESG) outcomes for Queensland. This included collaborating with the Queensland Government on the development of the inaugural Queensland Sustainability Report with information about the State’s ESG commitments and outcomes.
In September 2021, QTC issued $3.0 billion of a new 1.50% 2 March 2032 Green Bond, supporting Queensland’s pathway to climate resilience and an environmentally sustainable economy. This was the fourth and longest tenor Green Bond for QTC, further diversifying funding alternatives and continuing to build QTC’s Green Bond curve.
QTC continued to protect client’s interest rate risk with effective management activities. For the year under review, QTC’s management of the State’s debt enabled an interest rate reduction equivalent to $404.6 million.
QTC’s asset management strategy to provide protection against rising outright yields and widening credit spreads allowed QTC to deliver $59.6 million (2020–21: $71.0 million) in investment returns to its government clients through the QTC Capital Guaranteed Cash Fund (the Cash Fund). The Cash Fund retained its position as one of the largest managed cash funds in Australia with $9.6 billion under management at 30 June 2022 and outperformed the Bloomberg AusBond Bank Bill Index by 52 basis points.
In 2021–22, QTC reported an operating loss after tax from its capital markets operations of $36.2 million (2020–21: $115.1 million profit after tax). While QTC earns a profit in most years, it also holds capital in reserve to cover potential financial losses. The loss incurred this financial year was a result of a reduction in the mark-to-market value of the securities held in the Cash Fund. The Cash Fund operations have been set-up to enable QTC to provide clients with stable returns on their investments over the medium term.
QTC’s retained earnings balance of $555.4 million, demonstrates its continued strong financial position with retained earnings closely monitored to ensure QTC’s Board prescribed capital requirements are met.
Over the past five years, the returns from debt management have lowered the State’s costs by a total of $728.7 million. In addition, QTC’s net earnings have contributed to the payment of $150.0 million in dividends to the State. QTC’s dividend payments to Treasury are made on a needs basis, with no dividend required in 2021–22.
Value delivered for the State
QTC worked closely with Queensland Treasury to support the Queensland Government’s priority initiatives with advisory work focused on enhancing the institutional and financial strength of the State.
Highlights during the year included projects to support the Government to meet its energy policy commitments, the development of the SEQ Waste Management Plan, the identification of financial sustainability and efficiency initiatives for agencies delivering community and social services, and the provision of ongoing support for the Government’s COVID-19 response.
QTC continued to assist Queensland’s government-owned corporations and local governments with a range of advisory work in risk management, forecasting, asset and debt strategies and financial sustainability.
QTC also helped enhance financial capability across the public sector through its education collaboration with the University of Queensland. This year, the program has reached 2,900 participants from across the State.
Credit and ESG ratings
In the year under review, Standard & Poor’s and Moody’s Investors Service reaffirmed Queensland’s and QTC’s credit ratings. Fitch upgraded Queensland’s credit rating in December 2021. QTC is rated AA+/A-1+/Stable, Aa1/P-1/Stable and AA+/F1+/Stable by Standard & Poor’s, Moody’s Investors Service and Fitch Ratings respectively. These stable ratings are a key reason for continued demand from domestic and global investors for QTC debt, and for QTC’s ability to meet the larger issuance requirements through the COVID-19 period.
In addition, Queensland is currently rated AA for ESG by MSCI*.
With its ongoing focus on organisational excellence, QTC met its statutory obligations, completed core business activities on time and delivered initiatives focused on continuous improvement. QTC continued its focus on talent, engagement and development practices that support a high-performance workforce.
Independent recognition of QTC’s leadership and culture continued in 2021–22 and for the third consecutive year, QTC was recognised as one of Australia’s best places to work, receiving the ‘2022 5-Star Employer of Choice’ award from Human Resources Director.
Positioned for ongoing success
QTC’s achievements in the 2021–22 financial year have demonstrated significant performance outcomes against each of its strategic goals—to deliver sustainable funding, State and client value and organisational excellence. QTC is well positioned to continue its focus on strong issuance and asset management, prudent financial risk management, and supporting the government’s priority projects.
P C NOBLE
19 August 2022
*As of June 2022, the State of Queensland received an MSCI ESG Rating of AA, ESG Trend Negative. Certain information ©2022 MSCI ESG Research LLC. Data reproduced with permission from MSCI ESG Research LLC. No use or distribution without written consent. Data provided “as is” without any warranties. MSCI ESG Research LLC and affiliates assume no liability for or in connection with the data. Please see complete disclaimer in www.qtc.com.au/queenslands-sustainability-initiatives/.
Achieving sustainable access to funding
In 2021–22, QTC raised $15.3 billion in an environment of elevated volatility in bond markets. QTC continued to attract a diversified investor base, further supported by the establishment of three new bond lines, including a $3.0 billion, 2 March 2032 Green Bond, which is the largest AUD Green Bond deal to date.
QTC is a highly regarded bond issuer in global fixed-income markets and raises the funds needed by the State each year, often ahead of time, with its bond issues consistently over-subscribed.
On 15 June 2021, following the release of the 2021–22 State Budget, QTC announced it would raise $17.4 billion to meet the State’s term debt borrowing requirement. On 16 December 2021, the requirement was decreased by $3.1 billion to $14.3 billion, following the Queensland 2021–22 Budget Update. The reduction was a result of lower client borrowings and general government revenue uplifts.
QTC met its borrowing requirement of $14.3 billion and raised an additional $1.0 billion that was used to reduce the 2022–23 term debt borrowing requirement. The issuance during the year was executed through $6.5 billion in syndicated deals, $3.5 billion across seven tenders and $5.3 billion via reverse enquiry.
QTC’s well-managed funding program and reputation for high-quality debt issuance, means Queensland can access the funds it needs at cost-effective rates. To attract a broad investor base, QTC offers investors a diverse range of high-quality financial securities.
2021–22 funding highlights included:
- $3.0 billion 1.50% 2 March 2032 CBI certified Green Bond
- $1.5 billion 2.00% 22 August 2033 benchmark bond
- $2.0 billion 3m BBSW+1bp 3 March 2026 floating rate note, and
- $3.5 billion of issuance through seven tenders.
In 2021–22, QTC maintained the State’s strong liquidity position, which supports the State’s credit rating and provides reserves during periods of market volatility.
On 21 June 2022, QTC announced its indicative $14.4 billion term debt borrowing requirement for 2022–23.
QTC’s proactive management of its borrowing program and the management of its client funding and balance sheet activities helped to smooth its maturity profile, reducing its refinancing risk by achieving more evenly distributed maturities across the curve. All fixed rate debt issued in 2021–22 was in maturities 2027 and longer.
In 2021–22, QTC continued to keep the market informed with open and transparent information provided to investors on QTC’s funding activity and the Queensland Government’s economic and fiscal strategy. This included regular engagements through its Funding and Markets Division, digital communication channels, and virtual and face-to-face meetings. At the start of the year, in an environment of restricted travel, QTC utilised virtual channels to engage with both onshore and offshore investors. During the second half of the year, both domestic and international borders reopened and QTC was able to begin in-person activities.
The global Green Bond market has continued to grow rapidly with a record amount issued in 2021. In September 2021, QTC issued its fourth Green Bond line, extending QTC’s Green Bond curve for investors—with maturities of 2024, 2029, 2031 and 2032. The $3.0 billion issuance of QTC’s new 2032 Green Bond was QTC’s largest Green Bond deal to date, demonstrating a growing demand from investors for Green Bonds. More than 40 per cent of the new 2032 Green Bond deal was allocated to offshore investors and this deal also attracted a number of first-time investors. QTC received recognition for its 2032 Green Bond in the 2021 FinanceAsia Deal Achievement Awards in Australia and New Zealand for the Best Local Bond Deal and Best Sustainable Finance Deal for a Financial Institution.
QTC remains a leading semi-government issuer of Green Bonds in Australia, with $6.98 billion in Green Bonds on issue as at 30 June 2022. The size of the current eligible project and asset pool allows QTC to remain a regular Green Bond issuer. QTC continues to actively look for ways to further grow and diversify its pool, and support the State in highlighting Queensland’s pathway to climate resilience and an environmentally sustainable economy.
In 2021, QTC also collaborated with the Queensland Government on the development of the Queensland Sustainability Report 2021 with information about the State’s environmental, social and governance (ESG) commitments and outcomes.
QTC has a diverse range of funding instruments in a variety of markets and currencies. The majority of QTC’s funding is sourced through long-term debt instruments, with QTC’s AUD benchmark bonds being the principal source of funding. As at 30 June 2022, QTC’s total debt outstanding was approximately $125.0 billion at face value.
|OVERVIEW AS AT 30 June 2022||SIZE (AUDM)||MATURITIES||CURRENCIES|
|Short-term||Domestic T- Note||Unlimited||7–365 days||AUD|
|Euro CP||USD10,000||1–364 days||Multi-currency|
|US CP||USD10,000||1–270 days||USD|
|Long-term||AUD Bond||Unlimited||13 benchmark lines and a range of non-benchmark lines with various maturities*||AUD|
|Euro MTN||USD10,000||Any maturity subject to market regulations||Multi-currency|
|US MTN||USD10,000||9 months-30 years||Multi-currency|
* See QTC’s website for further details on non-benchmark bond lines.
Creating value for the State and clients
In 2021–22, QTC partnered with Queensland Treasury and its Queensland Government clients to deliver financial, economic and social outcomes to enhance Queensland’s future and economic prosperity. This work delivered cost-savings, economic benefits and analysis to inform enhanced decision-making. The positive outcomes generated for clients were achieved through delivering financial advisory and project implementation services; and providing high-quality services for borrowing, debt and cash management, and foreign exchange.
In the year under review, QTC worked closely with Queensland Treasury to deliver a program of work aligned with government priorities to provide the maximum financial and social outcomes for the State.
In 2021–22, QTC delivered a broad range of financial advisory assignments for Queensland Treasury and its public sector clients that address financial risk management issues and assist in making pragmatic business decisions.
QTC supports its clients to implement significant transformation projects within their own environments and enhance their project delivery capability. In 2021–22, QTC’s advisory work centred around projects that would enable significant benefits to the financial health of the State, with particular focus on local governments and government-owned corporations (GOCs).
Supporting the government’s priorities
QTC focuses on supporting its clients to implement projects that deliver maximum value to the State in terms of minimising risk, increasing revenue and reducing costs, while delivering broader social and economic benefits. The key priority projects QTC delivered include:
- Queensland Sustainability Report 2021: QTC collaborated with the Queensland Government on the development of the inaugural Queensland Sustainability Report 2021 with information about the State’s environmental, social and governance (ESG) commitments and outcomes.
- Energy reforms: QTC supported Queensland Treasury and other agencies with market modelling and research to assist the Queensland Government meet its energy policy commitments.
- SEQ Waste Management Plan: On behalf of the 11 councils in South-East Queensland, QTC developed the SEQ Waste Management Plan—a 10-year roadmap that identifies the sequence of levers and investments required to improve the economics of waste management operations, encourage economic development and deliver social and environmental benefits for the region. QTC has now established a project management office with the councils to implement the recommendations.
- Queensland Police Service: QTC supported the Queensland Police Service (QPS) by providing insights into financial sustainability.
- Financial Provisioning Scheme: In a multi-year project, QTC has continued to provide ongoing support to the Financial Provisioning Scheme Manager and ongoing implementation of the Financial Provisioning Scheme, which supports the assessment of the estimated rehabilitation cost of mining activities to enable risk assessed decisions.
- COVID-19: QTC provided resources to support the Government’s COVID-19 response initiatives.
Financial risk management for government owned corporations
QTC has assisted Queensland’s GOCs with a range of advisory work in risk management, forecasting, asset and debt strategies and commercial evaluations. This includes continuing the core GOC performance reviews for Queensland Treasury as part of QTC’s annual credit review process. QTC combines its deep quantitative and technical skills with a unique combination of equity and debt perspectives, to deliver timely commercial advice. This advice was leveraged during the extreme volatility experienced in electricity pricing this year where QTC provided strategic, market and credit advice to Queensland Treasury on energy pricing to support their critical decision-making framework.
Fostering strong relationships with local governments
QTC has continued to work closely with local governments and key stakeholders to help deliver positive community outcomes in a financially responsible way. This work included delivering and embedding capability improvements and assisting councils progress efficiency initiatives. QTC has also supported economic development initiatives and provided advice about financially managing the complexities of community requirements in regional centres.
In 2021–22, QTC delivered a number of initiatives for the Department of State Development, Infrastructure, Local Government, and Planning (DSDILGP) to support financial sustainability and expanding capabilities in local government.
QTC was engaged by the DSDILGP and the Electoral Commission of Queensland to assess the viability of the proposed boundary change between Livingstone Shire Council and Rockhampton Regional Council. QTC worked with both councils to estimate the financial impacts, including how the change could affect council rates.
During the year, QTC delivered economic updates for councils, bespoke workshops for elected members and council officers, and a Local Government Finance Professionals forum and masterclass with a focus on assisting local governments understand the demand-supply imbalance and its implications on their council’s operations and regional industries.
QTC has continued to work closely with Queensland Treasury and its government clients to improve whole-of-State balance sheet outcomes. QTC continued to provide low-cost loans and high-performing investment facilities throughout 2021–22.
Debt and risk management
In the year under review, QTC continued to successfully deliver its core mandate of providing clients with a low cost of funds by capturing the significant economies of scale and scope in the issuance, management and administration of the State’s debt.
QTC’s active management of the State’s debt provided a reduction of $132.0 million in the market value of Queensland Treasury’s borrowings, equivalent to a 0.06% decrease in the notional book interest rate.
Since late 2019, the combined duration of the Treasury Core and Super-Long Portfolio-Linked Loans (PLL) has been progressively lengthened at relatively low interest rates. This has resulted in the PLL book rate being further protected from the increase in yields that began in September 2021.
QTC has proactively managed the timing of drawdowns, use of facilities and book rate reviews to capture the above value in FY2022–23 interest costs paid by Treasury. This contributed to a cash flow saving for General Government of $102.0 million against the projected budgeted interest cost for the full financial year. This benefit is now crystalised into the Treasury Core PLL book rate providing a stable book rate for the upcoming FY2022–23 financial year and expected to deliver more cash flow savings against budgeted interest costs.
Proactive GOC refinancing and interest rate risk management generated savings of $13.3 million. QTC also completed a number of financial assessments on behalf of government, relating to requests by Queensland local governments for financial assistance to help fund the costs of proposed significant water infrastructure.
QTC offers cash management products that enable its clients to maximise the value of their surplus funds, including Fixed Rate Deposits, a Working Capital Facility and a Capital Guaranteed Cash Fund (the Cash Fund).
In 2021–22, the Cash Fund delivered $59.6 million in investment returns to its government clients during the year and retained its position as one of the largest managed cash funds in Australia with $9.6 billion under management at 30 June 2022. The Cash Fund provided strong relative returns and outperformed the Bloomberg AusBond Bank Bill Index by 52 basis points.
Throughout the year, QTC focused on an asset management strategy to provide protection against rising outright yields and widening credit spreads. This asset strategy included shortening asset duration at very tight levels due to the end of the Reserve Bank of Australia liquidity support programs. The Cash Fund’s security is underpinned by the asset’s investment profile, with 100 per cent of the Cash Fund invested in entities rated ‘BBB+’ or higher by Standard & Poor’s Global Ratings at 30 June 2022.
Throughout the year, QTC continued to meet with clients to provide insights into the Cash Fund’s structure, strategy and performance, and dynamically managed credit and money market positions in a challenging environment due to higher inflation and rising interest rates.
QTC’s foreign exchange (FX) services, including its online platform, enable its public sector clients to access wholesale market rates and hedge against currency fluctuations. In 2021–22, the FX service has continued to grow its transaction volumes. QTC continued to work with agencies to increase cost saving opportunities through dual currency pricing for the procurement of goods sourced from offshore.
In addition, this year QTC enhanced its FX online platform with new functionality that allows QTC clients to manage their foreign rate risk online with FX Forward contracts that are executed via QTC’s FX Dealing Desk. The management of these contracts online allows clients to draw down on their FX Forwards to facilitate foreign currency payments electronically, streamlining their payment processes. QTC does not retain any FX exposure as a result of FX activities.
QTC provided clients with a variety of economic publications, including a Weekly and Monthly Economic Review, and published research articles on the demand-supply imbalance, inflation, the possible path for the RBA’s cash rate, as well as the potential for recession risks in the US.
QTC provides education services to enhance financial decision-making and support effective engagement with its clients. Since 2017, the QTC Education Program collaborates with the University of Queensland (UQ) to facilitate the design and delivery of specialised content to public sector employees across the State. In 2021–22, the QTC Education Program delivered financial workshops to more than 2,900 participants through a combination of workshops, webinars, and masterclass sessions.
Key outcomes were achieved through delivering custom training programs to several Hospital and Health Services, the Department of State Development, Infrastructure, Local Government, and Planning (DSDILGP), and the Department of Health over the course of the past twelve months. Additionally, the QTC Education Program reached a wide range of public sector employees in a variety of different financial literacy topics.
The QTC webinar series continues to provide new and returning learners complimentary experiences to expand their understanding of financial management concepts. In the past twelve months, the QTC Education Program has seen record return rates with learners continuing to access the webinar content live and on-demand.
The QTC Education Program collaboration has been extended for another three years. This program aims to improve its educational offerings by revising the content and introducing a new dispersed learning model that will provide learners multiple touchpoints with educators throughout their development journey. Additionally, the education program will endeavour to increase learning opportunities through maximising regional travel opportunities; providing multiple packaged training events to regional, rural, and remote areas.
|Total Debt Outstanding
30 June 22
|Total Debt Outstanding
30 June 21
|General Government*||44 146 056||49 276 839|
|Energy||25 791 568||27 140 983|
|Water||12 785 013||14 915 274|
|Local governments||6 192 908||6 883 658|
|Transport||4 804 668||5 257 510|
|Education||624 475||878 616|
|Other||237 560||258 349|
|Total||94 582 248||104 611 229|
* General Government includes Queensland Treasury and Arts Queensland.
*The large decrease in Market Value has been driven by market yields.
Achieving organisational excellence
QTC’s performance in 2021–22, and its ability to manage ongoing disruption from COVID-19 and external market forces, was underpinned by its operational excellence, risk management, high performance workforce, and culture. QTC is committed to maintaining high organisational standards to enable an environment where corporate goals can be achieved, and organisational risks are actively monitored and managed.
Throughout the year, QTC has continued its ongoing focus on continuous improvement of its organisational capability through system enhancements, data governance, and the supplier ecosystem. These improvements have optimised the foundation of how QTC’s core funding and advisory functions are delivered and provide the platform for our organisation to maximise the delivery of value to the State.
In response to COVID-19, QTC has enhanced its readiness for business disruption, moving from a dedicated disaster recovery site to a more practical facility that can also be used as a project office when required. The new site was leveraged during the lockdown period in 2021 to enact a separated core business team at the height of the pandemic response in Queensland. QTC also continued to enhance its virtual capabilities and led key engagements using virtual channels with investors, clients and employees.
Technology, system and process enhancements
In the year under review, QTC settled $354.3 billion in transaction volume, with no cost of errors and implemented a number of initiatives to automate process, simplify reporting and improve data quality.
QTC renewed its contract with its primary information technology service provider with a commercial agreement for core IT services for a further three years.
QTC performed three updates to its core finance system and implemented a new reporting process to report on QTC’s payment times to small businesses, in-line with the requirements of the Payment Times Reporting Act 2020.
QTC enhanced its client transaction portal, allowing faster and improved access for clients to their data and reports. In addition, client reporting improvements have enabled increased flexibility for clients to generate loan statements and streamline monthly reporting processes.
Following the review of QTC’s Enterprise Data Strategy, QTC developed a roadmap to realise its target state data architecture through a Strategic Data Program. Detailed program planning is underway, with consideration of resourcing and capability requirements, and a cost versus benefit analysis.
In 2021–22, QTC implemented new frameworks to guide the governance of its evolving systems and data platforms. This included a data governance solution to help manage and govern data locations and a new governance framework for the use of the Microsoft Power Platform.
QTC continues to cultivate a healthy risk environment, with a proactive approach to identifying and mitigating risks within enterprise-wide risk management. This includes developing a risk appetite statement that establishes clear boundaries within which QTC’s material risks are managed. The framework incorporates key internal controls, and through periodic attestation by control owners, assurance is given to management and the Board that these controls are operating effectively. Throughout 2021–22, QTC managed its portfolio market risk exposures, including interest rate, foreign exchange and counterparty risk, within its Board-approved risk management framework. QTC continues to hold a portfolio of diverse, liquid financial securities to meet the State’s liquidity requirements, consistent with policy requirements.
The outcome of the 2021–22 internal audit program was positive with 13 internal audits conducted and completed successfully, with ratings demonstrating a well-controlled environment.
QTC manages its operational cyber risk through continual improvement and the coordination of four key elements: people, process, technology, and threat monitoring. This year, QTC enhanced its cyber security awareness program and training, and conducted workshops to identify opportunities to improve its resilience in a threat environment that is becoming increasingly sophisticated. A range of activities to assess and test its defences were undertaken, and infrastructure upgrades were also implemented in the period to improve detection and protection capabilities.
The benefits of QTC’s new Enterprise Design Committee (established in 2020–21) were realised in 2021–22 and resulted in improved prioritisation of organisational initiatives, and efficiencies for their implementation. The committee’s key objectives are to ensure a current state view of QTC’s Enterprise Architecture is maintained and to approve and prioritise change initiatives impacting people, technology, data and information and process. Change initiatives undertaken during the past year predominantly related to the maintenance and enhancement of QTC’s technology and data environments.
QTC prides itself on its high standards of integrity and ethics and has a comprehensive compliance training program designed to ensure QTC staff are risk aware and understand their obligations. In addition to mandatory on-line compliance training, QTC staff also participated in face-to-face conduct training that provided guidance on ethical matters and expected conduct, including market conduct. The training also highlighted the importance of speaking up and protections available to staff under the Public Interest Disclosure Act 2010 (Qld).
QTC employees also completed an ongoing program of mandatory compliance training with an emphasis on code of conduct, workplace health and safety, financial crime awareness, and privacy. Annual targeted and tailored training is completed by all employees to ensure they are continuously informed of their compliance obligations.
QTC’s talent, engagement and development practices continue to support a high-performance workforce.
QTC competes in the global financial industry to attract and retain its high calibre employees. Under the Queensland Treasury Corporation Act 1988, QTC employees are hired on individual contracts, with employment practices aligned to the financial markets in which it operates.
QTC’s remuneration framework is a key driver of attracting and retaining our high-performing employees and enabling our culture. Employees’ total compensation packages are comprised of fixed and variable remuneration elements (with entitlement to the variable component based on eligibility). Total compensation is benchmarked against remuneration data from the Financial Institutions Remuneration Group Inc (FIRG), which provides salary survey data for the Australian finance industry. QTC’s variable remuneration element of total compensation provides an opportunity for an annual short-term incentive for eligible employees, designed to ensure market competitiveness and reward outstanding organisational and individual performance. The QTC Board approves the entitlement to, and the quantum of, the annual review of fixed remuneration and variable short-term incentives.
The Board regularly reviews QTC’s remuneration framework to ensure that it aligns to the financial services market and meets its strategic priorities. This year was the first year following an independent review of the framework with key changes implemented to the mix of fixed and variable remuneration, short-term incentive (STI) percentage targets, and simplified STI elements to ensure that remuneration elements continued to align to the market.
The current employment market has been influenced by the impacts of COVID-19 and the strength in the broader economy. In 2021–22, QTC has experienced a higher turnover rate and has implemented a variety of retention and engagement strategies to combat these challenges and minimise workforce and culture risk.
QTC continued its professional development strategy, offering employees opportunities for individual growth and career development aligned to the capabilities required to meet future business objectives. To deliver on this strategy and strengthen organisational capability, QTC has continued to focus on leadership, talent and professional development.
QTC values employee feedback and regularly initiates ‘listening’ channels. In September 2021, QTC conducted a Mercer Culture Survey with results demonstrating strong cultural alignment and engagement. Opportunities for continual improvement were also identified, which has provided valuable data to inform QTC’s future people strategies and initiatives.
In the year under review, there have been multiple ways of working, with all non-critical employees working off-site during lockdowns, and then able to access flexibility to work from home or in the office as circumstances required. QTC has actively managed in-office COVID-19 cases and activated ongoing employee communication initiatives to ensure staff health and business continuity.
In 2021–22, key people initiatives included:
- aligning employees with strategic initiatives and providing further clarity on the organisation’s purpose through a range of staff forums and workshops
- continuing strategic workforce planning to align to our organisational vision and strategy, while incorporating the consideration of the future of work, digital transformation, and impacts of automation
- introducing performance indicators aligned to QTC’s cultural pillars and ‘how’ employees deliver performance outcomes
- enhancing employee benefits and the options available for employees to manage their work and life responsibilities
- focusing on leadership development and leadership excellence, including a senior leaders’ development program and a leading-self program
- delivering development programs with a focus on individual development and resilience, encouraging risk aware culture, and team culture and effectiveness
- providing on-demand professional development resources via our learning platforms
- providing employees with project opportunities embedded within client organisations
- driving active talent management and succession planning programs, and
- continuing the Chief Executive Awards recognition program—aligned to QTC’s values.
In 2021–22, QTC continued to embed and elevate its culture strategy based on the three cultural pillars of clarity, candour, and connection. The strategy is focused on ensuring the alignment of focus and purpose, direct and healthy challenge, and increased collaboration. QTC continues to cultivate a risk culture that ensures issues and risks in the business environment are anticipated and any impacts for QTC and stakeholders are managed effectively. This has been further strengthened by a focus on candour as part of QTC’s cultural development strategy.
For the third consecutive year, QTC was recognised as one of Australia’s best places to work, receiving the ‘2022 5-Star Employer of Choice’ award from Human Resources Director (HRD). In winning this award, HRD acknowledged QTC’s exceptional leadership, employee benefits, professional development programs and culture.
QTC’s Inclusion and Diversity Strategy recognises that diversity of perspective and experience improves performance, manages risk, and enhances decision making. In 2021–22, under the strategy’s priority streams of gender and inclusion, QTC:
- continued its partnership with Stepping Stone, supporting people living with mental illness
- continued its partnership with the Australian Network on Disability, as part of QTC’s intern program
- continued its range of mental and physical health programs to support employee wellbeing
- supported flexible and adaptive working, by offering a range of working arrangements to enable business outcomes and remain responsive and agile
- raised awareness for inclusivity and diversity by supporting a number of initiatives, including a walking tour visiting significant cultural sites in Brisbane City during National Reconciliation Week
- elevated employees understanding of the benefits of an inclusive working environment, and the neuroscience of inclusion, to highlight the importance inclusion at work
- embraced community giving by continuing our support of FareShare with QTC employees helping to prepare free and nutritious meals for people in need, and
- initiated new outreach with secondary school students to provide information about the Banking and Finance Industry, to encourage gender equal interest in STEM subjects and future careers in the industry.
For the third consecutive year, QTC was recognised as one of Australia’s best places to work, receiving the ‘2022 5-Star Employer of Choice’ award from Human Resources Director (HRD) as an employer that provides outstanding initiatives for career growth with learning and development opportunities, recognition programs and an all-encompassing, constructive culture.
Environmental, social and governance commitment
In 2021–22, QTC worked closely with its stakeholders to deliver key Environmental, Social and Governance (ESG) initiatives, including:
- providing institutional investors with green investment opportunities
- supporting the Queensland Government to deliver initiatives that support ESG outcomes for Queensland
- ESG reporting of QTC’s Capital Guaranteed Cash Fund (the Cash Fund), and
- providing organisational contributions that benefit the community.
QTC collaborated with the Queensland Government on the development of the inaugural Queensland Sustainability Report 2021. The report contains information about the State’s ESG commitments and outcomes. It provides information on identified ESG focus areas, the policies supporting the management of those focus areas and relevant reporting data, and public non-financial data for a broader range of relevant ESG factors.
QTC supported Queensland Treasury and other agencies with projects to enhance environmental outcomes for the State, including working on behalf of South-East Queensland’s councils to develop the SEQ Waste Management Plan, and assisting the Queensland Government with market modelling and research to support its energy policy commitments.
QTC has also worked closely with its clients on initiatives that support social outcomes for the State, including projects to support the Government and industries through COVID-19, significant outcomes to improve health services, and building solutions for children’s social services and regional local governments.
QTC has continued to support the financial governance of the State by providing accounting and administration services to the Queensland Treasury Holdings Group and the State Investment Operations Board in its oversight of the Land Restoration Fund and the State’s Long-Term Assets.
QTC Green Bonds support Queensland’s pathway to climate resilience and an environmentally sustainable economy. In September 2021, QTC issued $3.0 billion of a new 1.50% 2 March 2032 Green Bond. This was the fourth and longest tenor Green Bond for QTC, further diversifying funding alternatives and continuing to build QTC’s Green Bond curve. QTC received recognition for its 2032 Green Bond in the 2021 FinanceAsia Deal Achievement Awards in Australia and New Zealand for the Best Local Bond Deal and Best Sustainable Finance Deal for a Financial Institution.
QTC is currently the largest Australian semi-government, Climate Bonds Initiative (CBI) Certified, Green Bond issuer with $6.98 billion on issue as at 30 June 2022.
To support the Department of Environment and Science (DES) with the administration of the Land Restoration Fund (LRF), QTC acts as the Trustee and is responsible for the transaction processes and management reporting for the LRF. In 2021–22, QTC provided support in relation to the LRF $35.0 million investment to launch the Queensland Natural Capital Fund.
In 2021–22 QTC reported on the Cash Fund’s ESG profile, using the globally recognised ESG reporting provider Morgan Stanley Capital International (MSCI). The Cash Fund’s monthly ESG score is based on the weighted average ESG score of each of the Cash Fund’s bond investments. The Cash Fund’s ESG score is reported monthly in the Cash Fund client report.
In 2021–22, QTC contributed at an organisational, team and individual level to a number of social and community initiatives. QTC employees can access one day of paid leave each year to volunteer with its recognised charity.
QTC continued its partnership with Stepping Stone and the Australian Network on Disability, and supported a range of diversity and inclusion initiatives, including National Reconciliation Week during NAIDOC Week, RUOK Day, Harmony Day and International Women’s Day.
QTC employees volunteered at FareShare and raised money for the Wesley Mission through the Red Bag Appeal.
QTC is committed to maintaining high standards of corporate governance to support its strong market reputation, ensure that organisational goals are met, and manage and monitor risks. QTC’s corporate governance practices are continually reviewed and updated in line with industry guidelines and standards.
QTC was established by the Queensland Treasury Corporation Act 1988 (the QTC Act) as a corporation sole (ie, a corporation that consists solely of a nominated office holder). The Under Treasurer of Queensland is QTC’s nominated office holder and has delegated QTC’s powers to its two Boards:
- the Queensland Treasury Corporation Capital Markets Board (the Board), which was established in 1991 and manages all of QTC’s operations except those relating to certain superannuation and other long-term assets, and
- the State Investment Advisory Board, which was established in July 2008 to manage the State’s long-term assets.
The Under Treasurer, as QTC’s corporation sole, and the QTC Capital Markets Board have agreed the terms and administrative arrangements for the exercise of the powers that the corporation sole has delegated to the Board.
The Board operates in accordance with its charter, which sets out its commitment to various corporate governance principles and standards, its roles and responsibilities (based on its delegated powers), and the conduct of meetings. The charter provides that the role and functions of the Board are to:
- lead and oversee QTC
- approve the strategic direction and significant strategic initiatives of QTC
- approve Board-owned policies and charters
- oversee organisational culture, values, behaviours and risk
- ensure compliance with relevant legal, tax and regulatory obligations
- approve the annual financial statements and the annual report
- approve the annual administration budget and the total full-time equivalent complement
- approve major contracts and agreements
- approve the Corporate Plan, including the corporate performance measures
- approve the annual assessment of corporate performance
- approve the Remuneration Framework, the remuneration pool and short-term incentive targets
- approve the appointment/reappointment/dismissal of the Chief Executive and assess the Chief Executive’s performance against annual performance objectives
- approve the appointment of the internal audit partner and oversee the annual Internal Audit Plan
- oversee the external audit program, and
- evaluate Board and Board committee performance.
The Board typically holds nine meetings each year and may, whenever necessary, hold additional meetings.
The Board comprises members who are appointed by the Governor-in-Council, pursuant to section 10(2) of the QTC Act. Consideration is given to each Board member’s qualifications, experience, skills, strategic ability and commitment to contribute to QTC’s performance and achievement of its corporate objectives. QTC’s Board is constituted entirely of non-executive directors.
Conflict of interest
Board members are required to monitor and disclose any actual or potential conflicts of interest. Unless the Board determines otherwise, a conflicted Board member may not receive any Board papers, attend any meetings or take part in any decisions relating to declared interests.
Performance and remuneration
To ensure continuous improvement and to enhance overall effectiveness, the Board conducts an annual assessment of its performance. Board members’ remuneration is determined by the Governor-in-Council (details are disclosed in QTC’s financial statements).
The Board has established three committees, each with its own charter, to assist it in overseeing and governing various QTC activities. The complete roles and responsibilities of each committee are outlined in the charters available on the QTC website.
Funding and Markets Committee
The Funding and Markets Committee is a decision-making and advisory body responsible for overseeing and assisting the Board with:
- funding and markets-related key policies and compliance with relevant legislation
- the alignment of funding and markets activities with QTC’s policies and risk appetite
- QTC’s risk appetite, risk tolerance and risk mitigation strategies for funding and markets activities
- assessing QTC’s ability to access suitable funding markets to meet the State’s borrowing requirements and maintain appropriate levels of liquidity
- liquidity pool performance, and
- Cash Fund and Asset Liability Management Portfolio performance.
The Funding and Markets Committee must have at least three members and meet at least four times a year.
Human Resources Committee
The Human Resources Committee is a decision-making and advisory body responsible for overseeing and assisting the Board with:
- human resources-related key policies and compliance with relevant legislation
- the framework for remuneration and performance reviews
- the integrity and consistency of QTC’s corporate culture
- succession planning for the executive leadership team, executive development and talent pipeline risks
- strategic workforce planning and operational resource planning, and
- people material risks.
The Human Resources Committee must have at least three members and meet at least three times a year.
Risk and Audit Committee
The Risk and Audit Committee is a decision-making and advisory body responsible for overseeing and assisting the Board with:
- the appropriateness and effectiveness of QTC’s enterprise-wide risk management system (including the enterprise-wide risk management framework, the risk appetite statement, and risk management strategies and policies) and the internal control framework
- risk and risk management, including carriage of the risks attributed to the Risk and Audit Committee
- the effectiveness of internal control processes
- the integrity of the financial statements and associated year-end and interim processes, and
- the adequacy and effectiveness of audit activities.
The Risk and Audit Committee must have at least three members and meet at least four times a year.
During the year, the Risk and Audit Committee recommended the adoption of annual financial statements, reviewed external and internal audit reports and the progress in implementing the recommendations from those reports, approved QTC’s Internal Audit Plan and reviewed the Queensland Audit Office’s External Audit Plan.
1 Gerard Bradley retired from the QTC Board, effective 30 June 2022.Damien Frawley was appointed as the QTC Board Chair from 1 July 2022
2 Leon Allen’s appointment is an ex officio appointment within Queensland Treasury.
3 Neville Ide was reappointed from 1 October 2021 to 30 September 2025.
|Gerard Bradley AO
BCOM, DIPADVACC, FCA, FCPA, FAICD, FIML
|Prior to his appointment as the Chair of QTC’s Board, Mr Bradley was the Under Treasurer and Under Secretary of the Queensland Treasury Department, a position he held from 1998 to 2012. He was also a QTC Board member from 2000–2007.
Mr Bradley has extensive experience in public sector finance gained in both the Queensland and South Australian treasury departments. He was Under Treasurer of the South Australian Department of Treasury and Finance from 1996 to 1998, and of Queensland’s Treasury Department from 1995 to 1996. Mr Bradley held various positions in Queensland Treasury from 1976 to 1995, with responsibility for the preparation and management of the State Budget and the fiscal and economic development of Queensland.
He is currently a Non-Executive Director of Star Entertainment Group Ltd, Pinnacle Investment Management Group Limited and the Winston Churchill Memorial Trust, a Member of the Queensland regional selection committee for Churchill fellowships, and a Director of the Pinnacle Charitable Foundation.
BA (HUM), GRAD DIP PUBLIC POLICY, MAICD
Appointed 16 July 2020.
|Leon Allen was appointed Under Treasurer of Queensland Treasury in September 2021, having joined the Department as Deputy Under Treasurer in May 2020, with responsibility for economic, fiscal and commercial policy.
Mr Allen’s appointment came after 13 years with the Institutional Banking and Markets division of the Commonwealth Bank of Australia where he held senior leadership positions both domestically and internationally.
Mr Allen’s career also includes periods with the Australian Government’s Department of Finance, Queensland Treasury and Ergon Energy. In addition to his role on the QTC Capital Markets Board, Mr Allen is a member of the State Investment Advisory Board.
BBUS (ACCTG), MCOMM (ACCTG AND FIN), FCPA, FAICD
Appointed 1 October 2018.
|Neville Ide has more than 40 years’ experience in finance and treasury management having held executive roles in the government, finance and banking sectors, including Queensland Treasury Corporation for 12 years and as Group Treasurer at Suncorp Metway Limited.
Mr Ide’s industry knowledge and experience covers banking, insurance, infrastructure and corporate treasury management, including debt and equity capital markets, balance sheet structuring and financial risk management.
Mr Ide has served as a Non-Executive Director on several public and private company boards since 2006, including appointments to Queensland Motorways Limited, RACQ Insurance, RACQ Bank, Retech Technology Limited, SunWater Limited, and as a previous QTC Board member. He is currently a Director of QBANK.
B SCIENCE (HONS), DIP ED, GRAD DIP SEC, MBA, MAICD, F FIN
Appointed 1 July 2016.
|Anne Parkin has more than 25 years’ international management and board level experience across Asia-Pacific banking and financial services.
Ms Parkin has held diverse leadership roles in domestic and global broking and banking, superannuation administration, retail management and education in both the public and private sectors. At an executive level, she has experience operating in highly regulated businesses including banking with Credit Suisse and UBS, and in Australian superannuation.
Ms Parkin is currently the Chair of an SME in the energy sector. She is the former Chair of a start-up company and a former Non-Executive Director of both Credit Suisse Securities Malaysia and Credit Suisse Securities Philippines. Ms Parkin was also the Executive Director of the Hong Kong Control Committee, responsible for oversight of operational risk for Credit Suisse Hong Kong and its affiliates, and the executive in charge of operational matters with local regulators, including the Hong Kong Monetary Authority and Hong Kong Securities and Futures Commission.
Appointed 9 July 2015.
|Karen Smith-Pomeroy is an experienced financial services senior executive with a specialty in risk and governance.
Ms Smith-Pomeroy held senior executive roles with Suncorp Group Limited from 1997 to 2014, including Chief Risk Officer Suncorp Bank from 2009 to 2013, and Executive Director, Suncorp Group subsidiary entities from 2009 to 2014. She has also held non-executive roles on a number of Government and commercial boards and committees including CS Energy Limited and Tarong Energy Corporation Limited.
Ms Smith-Pomeroy is currently Chair of National Affordable Housing Consortium Limited and the Regional Investment Corporation, and a Non-Executive Director of Stanwell Corporation Limited and Kina Securities Limited. She is also an Independent Chair of the Audit and Risk Committee of South Bank Corporation and an Independent Audit Committee member of the Department of State Development, Infrastructure, Local Government and Planning.
DIP FIN SERV, FAICD
Appointed 13 November 2014.
|Jim Stening has more than 30 years’ experience in financial markets in the fixed income asset class, including hands-on trading and investing in Australian and global capital markets.
Mr Stening has extensive experience in debt markets, business development, executive management and corporate governance across a diverse range of economic cycles. He has held senior roles at NAB, Merrill Lynch and Banco Santander.
Mr Stening is the founder and Managing Director of FIIG Securities Limited, Australia’s largest specialist fixed-income firm and a Non-Executive Director of related companies, and a Fellow of the Australian Institute of Company Directors.
BBUS, DIP SUPN MGT, FAICD, FASFA
Appointed 1 October 2020.
|Rosemary Vilgan is an experienced Non-Executive Director, with expertise in financial services and business leadership and transformation. She was the Chief Executive of QSuper, a global financial services business with $90.0 billion in accounts, from 1998 until 2015.
Ms Vilgan is currently the Chairperson of the Commonwealth Bank Group Staff Superannuation Fund, a Member of the Board of the Guardians of New Zealand Superannuation and a Member of the Cambooya Investment Committee. Her former roles include Chairperson of the Federal Government’s Safety, Rehabilitation and Compensation Commission, a member of the Board of the Children’s Hospital Foundation (Qld) and a Queensland Council member of AICD. She is a former Councillor, Deputy Chancellor and Chairperson of the Audit and Risk Committee at Queensland University of Technology (QUT), and a former director and Chair of the Board of the Association of Superannuation Funds of Australia (ASFA).
In 2013, Ms Vilgan was named the Telstra Australian Businesswoman of the Year. She holds qualifications in business and superannuation and is a Fellow of both AICD and ASFA and a Member of Chief Executive Women.
The responsibility for the day-to-day operation and administration of QTC is delegated by the Board to the Chief Executive and the Executive Leadership Team. The Chief Executive is appointed by the Board and executives are appointed by the Chief Executive. Executive Leadership Team appointments are made on the basis of qualifications, experience, skills, strategic ability, and commitment to contribute to QTC’s performance and achievement of its corporate objectives.
QTC’s Executive Leadership Team
as at 30 June 2022
|Philip Noble||Chief Executive|
|Grant Bush||Deputy Chief Executive and Managing Director, Funding and Markets|
|Mark Girard||Managing Director, Clients|
|Rupert Haywood||Managing Director, Corporate Services and Chief Risk Officer|
|Jane Keating||Managing Director, Finance, Data and Compliance|
The Financial and Performance Management Standard 2019 (Qld) (Standard) governs the operation of QTC’s internal audit function. QTC outsourced its independent internal audit function to EY for the 2020–21 financial year. Internal audit reports to the Risk and Audit Committee and is conducted under an Internal Audit Policy, consistent with the relevant audit and ethical standards. The role of internal audit is to support QTC’s corporate governance framework by providing the Board (through the Risk and Audit Committee) with:
- assurance that QTC has effective, efficient and economical internal controls in place to support the achievement of its objectives, including the management of risk, and
- advice with respect to QTC’s internal controls and business processes.
Internal audit is responsible for:
- developing an annual audit plan, based on the assessment of financial and business risks aligned with QTC’s strategic goals and objectives, as well as material risks, and approved by the Risk and Audit Committee
- providing regular audit reports and periodic program management reports to the management team and the Risk and Audit Committee, and
- working constructively with QTC’s management team to challenge and improve established and proposed practices and to put forward ideas for process improvement.
In the year under review, EY completed its internal audits in accordance with the approved annual audit plan.
In accordance with the provisions of the Auditor-General Act 2009, the Queensland Audit Office is the external auditor for QTC. The Queensland Audit Office has the responsibility for providing Queensland’s Parliament with assurances as to the adequacy of QTC’s discharge of its financial and administrative obligations.
All audit recommendations raised by the Queensland Audit Office that were due during the reporting period were addressed.
The State Investment Advisory Board (SIAB) was established in 2008 as an advisory Board of Queensland Treasury Corporation under section 10 of the QTC Act. SIAB was established to manage long-term assets for the State by a board independent of QTC’s capital markets operations. The long-term assets have no impact on QTC’s capital markets operations and there is no cash flow affect for QTC.
In 2021–22, with power delegated from QTC, the SIAB was responsible for:
- providing governance oversight of the financial assets set aside by the Queensland Government to meet future employee liabilities and other long-term obligations of the State
- providing governance oversight of the financial assets set aside to support long term initiatives of the Queensland Government
- providing investment governance assistance in connection with the Financial Provisioning Fund established under the Mineral and Energy Resources (Financial Provisioning) Act 2018 and the National Injury Insurance Scheme Fund, Queensland.
The SIAB members are appointed by the Governor-in-Council, pursuant to section 10(2) of the QTC Act. Remuneration for the SIAB members is determined by the Governor-in-Council. In 2021–22, the members of the SIAB were:
|Name||Position||Attended||Eligible to attend|
|Board meetings held: 4|
|Leon Allen1, Acting Under Treasurer||Chair||3||4|
|William Ryan2, Queensland Treasury||Member||3||4|
|Philip Graham3, External member||Member||4||4|
|Tony Hawkins4, External member||Member||4||4|
|Maria Wilton5, External member||Member||4||4|
1 The Chair of SIAB is an ex officio role. Leon Allen’s term ended on 30 June 2022 and Mr Allen was reappointed from 7 July 2022 to 30 September 2025.
2 This position is an ex officio appointment within Queensland Treasury. William Ryan’s term ended on 30 June 2022 and Mr Ryan was reappointed from 7 July 2022 to 30 September 2025.
³ Philip Graham’s term ended on 30 June 2022 and Mr Graham was reappointed from 7 July 2022 to 30 September 2024.
⁴ Tony Hawkins’ term ended on 30 June 2022. Catherine Wood was appointed from 7 July 2022 to 30 September 2025.
⁵ Maria Wilton’s term ended on 30 June 2022 and Ms Wilton was reappointed from 7 July 2022 to 30 September 2024.
BA (HUM), GRAD DIP PUBLIC POLICY, MAICD
Chairman Appointed 29 April 2021.
Tenure to 30 June 2025.
Leon Allen was appointed Under Treasurer of Queensland Treasury in September 2021. He joined as Deputy Under Treasurer, Queensland Treasury in May 2020 with responsibility for economic, fiscal and commercial policy.
Mr Allen’s appointment came after 13 years with the Institutional Banking and Markets division of the Commonwealth Bank of Australia where he held senior leadership positions both domestically and internationally.
Mr Allen’s career also includes periods with the Australian Government’s Department of Finance, Queensland Treasury and Ergon Energy. He is also a member of the QTC Capital Markets Board.
BBUS (BANKING AND FIN), GRAD CERT POLICY ANALYSIS
Appointed 19 November 2020.
Tenure to 30 June 2025.
William Ryan is the Head of Fiscal, Queensland Treasury, with responsibilities for managing the State’s budget and balance sheet, and ensuring the long-term sustainability of Queensland’s fiscal position. He forms part of Queensland Treasury’s Senior Leadership Team and serves as a member of the Queensland Government Insurance Fund Governance Committee.
Prior to his current role, Mr Ryan held senior leadership roles in Queensland Treasury over a 20-year career. These roles have included developing investment programs, financial assurance modelling, infrastructure program and economic policy analysis.
Philip (Phil) Graham
BA (ECON, HONS), MCOM (FIN, HONS), CFA, GAICD
Appointed 4 July 2019.
Tenure to 30 June 2024.
Phil Graham has extensive experience in investment management, financial markets, and economic policy. He is an independent member of the Lonsec Asset Allocation Committee and a consultant to AustralianSuper.
Mr Graham was Senior Portfolio Strategist and Deputy Chief Investment Officer at Mercer from 2007–2018. He also held senior roles at QIC and Access Capital Advisors, and prior to this he worked for the Reserve Bank of Australia and the ANZ Banking Group.
Mr Graham is a past-President of the CFA Society of Melbourne and was the Presidents Council Representative for the CFA Asia Pacific North and Oceania region in 2015–2019. He currently serves on the CFA Disciplinary Review Committee.
Tony Hawkins AM
B COMM, DIP OF FIN MGT, FCPA, GAICD
Appointed 4 July 2019.
Tenure to 30 June 2022.
Tony Hawkins has more than 45 years’ experience in the insurance, financial services, mining, building and construction industries. He was the CEO of WorkCover Queensland from 1998–2016 and was responsible for a turnover of $1.5 billion.
Prior to this, Mr Hawkins held management positions at AXA Australia, National Mutual and Australian Casualty and Life.
Mr Hawkins is currently a Director at Lexon Insurance Pty Ltd and the Operations Manager at KA Hawkins Constructions Pty Ltd. He has previously held directorships at QSuper Limited and the Queensland Workplace Health and Safety Board.
Maria Wilton AM
BEC, CFA, FAICD, FAIST
Appointed 4 July 2019.
Tenure to 30 June 2024.
Maria Wilton has more than 30 years’ experience in the financial services industry. Ms Wilton was Chair and Managing Director of Franklin Templeton Investments Australia from 2006–2018. She previously held roles with BT Financial Group, County Investment Management, JP Morgan Investment Management and Commonwealth Treasury.
Ms Wilton is a member of the Global Board of Governors of the Chartered Financial Analyst Institute and Vice Chair of Infrastructure Victoria. She is a Director of Post Super Ltd, Dexus Wholesale Property Fund, VFMC and the Confident Girls Foundation.
Financial Statements for the 2021-22 Financial Year (Download pdf, 899Kb)
The foregoing general purpose financial statements have been prepared pursuant to section 62(1) of the Financial Accountability Act 2009 (the Act), section 39 of the Financial and Performance Management Standard 2019 and other prescribed requirements.
The Directors draw attention to note 2(a) to the financial statements, which includes a statement of compliance with International Financial Reporting Standards.
In accordance with section 62(1)(b) of the Act we certify that in our opinion:
i. the prescribed requirements for establishing and keeping the accounts have been complied with in all material respects, and
ii. the foregoing annual financial statements have been drawn up so as to present a true and fair view of Queensland Treasury Corporation’s assets and liabilities, financial position and financial performance for the year ended 30 June 2022.
We acknowledge responsibility under section 7 and section 11 of the Financial and Performance Management Standard 2019 for the establishment and maintenance, in all material respects, of an appropriate and effective system of internal controls and risk management processes with respect to financial reporting throughout the reporting period.
The financial statements are authorised for issue on the date of signing this certificate which is signed in accordance with a resolution of the Capital Markets Board.
D J FRAWLEY
P C NOBLE
19 August 2022
Independent Auditor's report
Independent-Auditor’s-Report for the 2021-22 Financial Year (Download pdf, 2,059KB)
QTC is required to make various disclosures in its Annual Report. QTC is also required to make various disclosures on the Queensland Government’s Open Data website (https://data.qld.gov.au) in lieu of inclusion in its Annual Report. This appendix sets out those mandatory disclosure statements that are not included elsewhere in the report or made available on the Open Data website.
QTC is committed to providing accessible services to Queensland residents from culturally and linguistically diverse backgrounds. QTC did not receive any requests for interpreters and there was no overseas travel in 2021–22.
Information systems and record keeping
Information and Data are vital assets and QTC is committed to continuously improving and maintaining information and data management practices that meet its business needs, legislative requirements and stakeholder expectations. QTC adheres to the Public Records Act 2002 and the General Retention and Disposal Schedule with respect to information and records management.
QTC continues to evolve its electronic document and information management systems for improved management of both digital and physical records particularly in relation to expanding cloud technologies. QTC has also transitioned its paper based records in its core operations division to digital record keeping. QTC is maturing its information security capabilities to protect internally and externally accessible records.
QTC has not experienced any serious breaches and continues to place focus on education, communication and evolving our technical environment to manage information and data security risk.
Public Sector Ethics Act
QTC provides the following information pursuant to obligations under section 23 of the Public Sector Ethics Act 1994 (Qld) to report on action taken to comply with certain sections of the Act.
QTC employees are required to comply with QTC’s Code of Conduct, which aligns with the ethics principles and values in the Public Sector Ethics Act 1994 (Qld), as well as the Code of Conduct and market standards established by the Australian Financial Markets Association of which QTC is a member. Both codes are available to employees via QTC’s intranet. A copy of QTC’s Code of Conduct can be inspected by contacting QTC’s Human Resources Group (see Appendix D for contact details). Appropriate education and training about the Code of Conduct, expected standards of conduct and ethical issues has been provided to all new and existing QTC staff.
QTC’s human resource management and corporate governance policies and practices ensure that QTC:
- acts ethically with regard to the conduct of its business activities and within appropriate law, policy and convention, and
- addresses the systems and processes necessary for the proper direction and management of its business and affairs.
QTC is committed to:
- observing high standards of integrity and fair-dealing in the conduct of its business, and
- acting with due care, diligence and skill.
QTC’s Compliance Policy requires that QTC and all employees comply with the letter and the spirit of all relevant laws and regulations, industry standards, and relevant government policies, as well as QTC’s own policies and procedures.
Human Rights Act
QTC’s strategic and operational plans are in line with the objectives of the Human Rights Act 2019 (the Act). The plans aim to ensure QTC is respecting, protecting and promoting human rights in decision making and actions.
The Act requires QTC to consider human rights when performing functions of a public nature and only limit human rights after careful consideration. QTC’s internal policies and practices are aligned to the Act, as guided by external advice.
Remuneration: Board and Committee
For the year ending 30 June 2022, the remuneration and committee fees of the QTC Capital Market Board members (excluding superannuation contributions and non-monetary benefits) were as follows:
The total remuneration payments made to the members of the QTC Capital Markets Board was $356,761 and the total on-costs (including travel, accommodation, car parking and professional memberships for members) was $22,642.
For the year ending 30 June 2022, the remuneration and committee fees of the QTC State Investment Advisory Board members (excluding superannuation contributions and non-monetary benefits) were as follows:
The total remuneration payments made to the members of the QTC State Investment Advisory Board was $110,718 and the total on-costs (including travel, accommodation, car parking and professional memberships for members) was $1,382.
The related entities in Note 23 are not equity accounted in the financial report of the Queensland Treasury Corporation. These entities are consolidated into Queensland Treasury’s financial report.
Basis point: One hundredth of one per cent (0.01 per cent).
Bond: A financial instrument where the borrower agrees to pay the investor a rate of interest for a fixed period of time. A typical bond will involve regular interest payments and a return of principal at maturity.
Budget Update: Mid-Year Fiscal and Economic Review.
CP (commercial paper): A short-term money market instrument issued at a discount with the full face value repaid at maturity. CP can be issued in various currencies with a term to maturity of less than one year.
Credit rating: Measures a borrower’s creditworthiness and provides an international framework for comparing the credit quality of issuers and rated debt securities. Rating agencies allocate three kinds of ratings: issuer credit ratings, long-term debt and short-term debt. Issuer credit ratings are among the most widely watched. They measure the creditworthiness of the borrower including its capacity and willingness to meet financial obligations.
Fixed Income Distribution Group: A group of financial intermediaries who market and make prices in QTC’s debt instruments.
Floating rate notes (FRNs): A debt instrument which pays a variable rate of interest (coupon) at specified dates over the term of the debt, as well as repaying the principal at the maturity date. The floating rate is usually a money market reference rate, such as BBSW, plus a fixed margin. Typically the interest is paid quarterly or monthly.
GOC: Government-owned Corporation.
Green Bonds: QTC green bonds on issue are guaranteed by the Queensland State Government, issued under the AUD Bond Program with Rule 144A capability and certified by the Climate Bonds Initiative (CBI). Proceeds from QTC green bonds are allocated against eligible projects and assets in accordance with QTC’s Green Bond Framework. Eligible projects and assets are those funded, entirely or in part, by the Queensland Government, State-Government related entities and local governments that support Queensland’s pathway to climate resilience and an environmentally sustainable economy. QTC’s Green Bond Framework is aligned with the CBI Climate Bonds Standard 3.0 and the International Capital Market Association (ICMA) Green Bond Principles 2018 allowing QTC to issue both CBI certified green bonds and ICMA Green Bond Principles certified green bonds. An independent third party provides assurance of QTC’s framework, eligible project and asset pool and green bonds on issue.
Issue price: The price at which a new security is issued in the primary market.
Liquid: Markets or instruments are described as being liquid, and having depth, if there are enough buyers and sellers to absorb sudden shifts in supply and demand without price distortions.
Market value: The price at which an instrument can be purchased or sold in the current market.
MTN (Medium-Term Note): A financial debt instrument that can be structured to meet an investor’s requirements in regards to interest rate basis, currency and maturity. MTNs usually have maturities between nine months and 30 years.
QTC: Queensland Treasury Corporation.
RBA: Reserve Bank of Australia.
T-Note (Treasury Note): A short-term money market instrument issued at a discount with the full face value repaid at maturity. T-Notes are issued in Australian dollars with a term to maturity of less than one year.
|SUMMARY OF REQUIREMENT||BASIS FOR REQUIREMENT||ANNUAL REPORT REFERENCE|
|LETTER OF COMPLIANCE||A letter of compliance from the accountable officer or statutory body to the relevant Minister/s||ARRs – section 7||Page 2|
|ACCESSIBILITY||Table of contents||ARRs – section 9.1||Page 1|
|Glossary||ARRs – section 9.1||Appendix B|
|Public availability||ARRs – section 9.2||Page 1, Appendix D|
|Interpreter service statement||Queensland Government Language Services Policy ARRs – section 9.3||Appendix D|
|Copyright notice||Copyright Act 1968
ARRs – section 9.4
|GENERAL INFORMATION||Introductory information||ARRs – section 10||Page 3-7|
|NON-FINANCIAL PERFORAMNCE||Government’s objectives for the community||ARRs – section 11.1||Pages 8-13|
|Agency objectives and performance indicators||ARRs – section 11.2||Pages 6-133
|FINANCIAL PERFORMANCE||Summary of financial performance||ARRs – section 12.1||Pages 6-7, Notes to Financial Statements: Pages 28-50|
|GOVERNANCE – MANAGEMENT AND STRUCTURE||Organisational structure||ARRs – section 13.1||Pages 17-21|
|Executive management||ARRs – section 13.2||Page 21|
|Public Sector Ethics||Public Sector Ethics Act 1994
ARRs – section 13.4
|Human Rights||Human Rights Act 2019 ARRs – section 13.5||Appendix A|
|GOVERNANCE – RISK MANAGEMENT AND ACCOUNTABILITY||Risk management||ARRs – section 14.1||Page 14, 18|
|Audit committee||ARRs – section 14.2||Pages 18|
|Internal audit||ARRs – section 14.3||Page 1|
|Information systems and record keeping||ARRs – section 14.5||Appendix A|
|GOVERNANCE – HUMAN RESOURCES||Strategic workforce planning and performance||ARRs – section 15.1||Pages 14-15|
|OPEN DATA||Statement advising publication of information||ARRs – section 16||Appendix A|
|Consultancies||ARRs – section 33.1||Appendix A
|Overseas travel||ARRs – section 33.2||Appendix A|
|Queensland Language Services Policy||ARRs – section 33.2||Appendix A|
|FINANCIAL STATEMENTS||Certification of financial statements||FAA – section 62
FPMS – sections 38, 39 and 46
ARRs – section 17.1
|Independent Auditor’s Report||FAA – section 62
FPMS – section 46
ARRs – section 17.2
Note: This checklist excludes reference to any requirements that do not apply to QTC for the current reporting period.
FAA: Financial Accountability Act 2009; FPMS: Financial and Performance Management Standard 2019;
ARRs: Annual report requirements for Queensland Government agencies
Queensland Treasury Corporation
Level 31, 111 Eagle Street
Brisbane Queensland Australia
GPO Box 1096
Telephone: +61 7 3842 4600
Queensland Treasury Corporation’s annual reports (ISSN 1837-1256 print; ISSN 1837-1264 online) are available on QTC’s website at www.qtc.com.au/about-qtc/annual-reports.
If you would like a copy of a report posted to you, please call QTC’s reception on +61 7 3842 4600.
If you would like to comment on a report, please complete the online enquiry form located on our website.
|Queensland Treasury Corporation (Reception)||+61 7 3842 4600|
|Stock Registry (Link Market Services Ltd)||1800 777 166|
QTC is committed to providing accessible services to Queensland residents from culturally and linguistically diverse backgrounds. If you have difficulty understanding this report, please contact QTC’s reception on +61 7 3842 4600 and we will arrange for an interpreter to assist you.
Information for institutional investors
Core to its key funding principles, QTC is committed to being open and transparent with investors and its partners in the financial markets.
Through its website, QTC provides a range of information for institutional investors on its various funding instruments, its annual borrowing program (including daily outstandings) and its Fixed Income Distribution Group. The website also provides information and links about Australia and Queensland to help investors gain a better understanding of:
- the different levels of government in Australia
- the forms of fiscal support the Australian Government provides to the states and territories
- relevant governance practices, legislation and policies
- financial data and budget information, and
- economic and trade data
QTC also offers institutional investors the ability to subscribe from its institutional investor section of the website to quarterly funding and market announcement updates, and QTC’s weekly AUD Bond Outstandings report.
Bloomberg ticker: qtc
Availability of annual reports
QTC’s annual reports (ISSN 1837-1256) are available on QTC’s website for the past five financial years, earlier years are available by request. Printed copies can also be provided; please contact us for further information.
We are committed to continually improving our Annual Report. Your feedback on QTC’s Annual Report, including presentation, ease of navigation, value of information, style of language, level of detail and suggestions for improvement, can be provided via our online enquiry form.
The materials presented on this site are provided by the Queensland Treasury Corporation for information purposes only. Users should note that the electronic versions of the Annual Report on this site are not recognised as the official or authorised version. The official copy of the Annual Report, as tabled in the Legislative Assembly of Queensland, can be accessed from the Queensland Parliament tabled papers website database.