Annual Report 16/17 ANNUAL REPORT 16/17

Transcription

1 Annual Report 16/17 ANNUAL REPORT 16/17 1

2 Letter of compliance 8 September The Honourable Kate Jones MP Minister for Education and Minister for Tourism, Major Events and the Commonwealth Games GPO Box City East Qld 4002 Dear Minister I am pleased to submit for presentation to the Parliament the Annual Report - and financial statements for Tourism and Events Queensland. I certify that this Annual Report complies with: the prescribed requirements of the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2009; 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 81 of this annual report or accessed at Yours sincerely Julieanne Alroe Acting Chair Tourism and Events Queensland Interpreter service statement The Queensland Government is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you have difficulty in understanding the annual report, you can contact us on and we will arrange an interpreter to effectively communicate the report to you. Public availability Copies of the Tourism and Events Queensland annual report are available online at Limited printed copies can be obtained by contacting Tourism and Events Queensland. Tel: (07) info@queensland.com Readers are invited to comment on this report at Copyright (Tourism and Events Queensland) Published by Tourism and Events Queensland, September Level 10, 30 Makerston Street, Brisbane, QLD 4000 ISSN: X 2 ANNUAL REPORT 16/17

3 Contents Letter of compliance...2 CEO s statement...4 Acting Chair's statement...5 About Tourism and Events Queensland...6 Our vision Our purpose Our mission Our role and functions Executive management Our values Locations Our operating environment Tourism landscape Industry performance Strategic risks Looking forward -18 Our performance...16 Queensland Government objectives for the community Objectives and performance indicators Service areas and service standards Annual Performance Statement -17 Strategic Priorities Highlights Deliver and promote a world-class events calendar Gold Coast 2018 Commonwealth Games Market the best address on earth Great Barrier Reef Tropical Cyclone Debbie Destination and experience development Focus on Asia Partnerships Corporate governance...28 Board performance Board committees Internal audit Risk management External scrutiny Board meetings Government bodies Statutory obligations Information systems and recordkeeping Efficient business operations Open Data Workforce planning, attraction and retention...36 Financial summary...38 Financial Report...39 Tourism and Events Queensland directory...80 Compliance checklist...81 Glossary of terms...83 ANNUAL REPORT 16/17 3

4 CEO s statement Inspiring the world to experience the best address on earth. Tourism and Events Queensland (TEQ) is driven by that mantra, determined to be innovative and collaborative while delivering both economic and social benefits for the state. We are a consumer-led, experience-focussed and destination-delivered organisation intent on capitalising on growth opportunities and developing authenticity in our tourism offerings. The Queensland tourism industry faced its fair share of challenges and again showed its resilience in -17 as it continued to build on the success and momentum of previous years. In -17, Queensland welcomed record international and domestic visitation through a combination of targeted campaign marketing, a focus on new air routes servicing the state and, above all, the hard work and commitment of the industry and its stakeholders. International visitor expenditure reached a record $5.2 billion, an increase of 3.2 per cent, underpinned by an 5.6 per cent increase in total visitors to 2.6 million. These visitors spent 53.9 million nights in Queensland. On the domestic front, overnight expenditure in Queensland increased 5.5 per cent to a record $15.4 billion for the period while domestic overnight visitor numbers increased 6.2 per cent to 21.5 million. China continues to be our largest international source market, delivering just over $1 billion in overnight visitor expenditure. Strong gains in expenditure were recorded from several source markets including Japan (18.2%), Taiwan (31.7%), Hong Kong (19.0%) and India (22.6%). Increasing aviation capacity remains central to creating growth in the industry and in partnership with Queensland airports, the Department of Tourism, Major Events, Small Business and the Commonwealth Games (DTESB), Tourism Australia (TA) and Regional Tourism Organisations (RTOs), TEQ has utilised the Advance Queensland: Connecting with Asia fund and the Attracting Aviation Investment Fund (AAIF) to secure new flights and increased capacity from domestic markets as well as key international markets including China, South Korea and Japan. The first flights secured under the Connecting with Asia funding were finalised in late June with the signing of an agreement with China Southern Airlines to fly three flights a week between Guangzhou and Cairns, a service forecast to pump $90 million into the Queensland economy. TEQ also transitioned its strategic marketing approach in -17, moving to include a greater focus on Queensland as the master brand while highlighting signature experiences designed to leverage key target markets. Under the five pillars of Reef, Islands and Beaches; Natural Encounters; Adventure and Discovery; Events; and Lifestyle, Culture and People, the new experience framework has been designed to give Queensland a competitive advantage. TEQ s targeted approach to reaching new consumers saw the I know just the place marketing campaign rolled out across key markets, showcasing Queensland s unique tourism offering told through the words of locals. The campaign, supported by a series of 90 second videos, aims to grow visitation, increase awareness of our tourism offerings and inspire more travellers to choose Queensland in an increasingly competitive market where travellers demand not just a holiday but to feel and be immersed in experiences. Since its launch in late November, the campaign has received more than one million Facebook likes, comments, shares and views while on Twitter more than 360 hours worth of footage was viewed in the first 24-hour period. The campaign has run in print, television, outdoor, digital and cinema formats in Queensland, New South Wales, Victoria and New Zealand since its launch. Throughout early, TEQ rolled out the new campaign messaging starting with trade engagement across Europe, the UK and the Americas. The new-look campaign targeting consumers started in the US in February, China in March and the UK in April. We have successfully worked to integrate our creative with key partners including Qantas in the United States and Disney in Australia through the promotion of the film Pirates of the Caribbean: Dead Men Tell No Tales, which was filmed in Queensland. In total, more than $293 million in publicity and promotional value was achieved through TEQ activities in the -17 financial year. This was further enhanced in the digital space where TEQ continued to connect with consumers across the globe by innovatively showcasing the state through social media and targeted online marketing. The It s Live! In Queensland major events calendar continued to grow in -17 to an asset now worth more than $600 million to the Queensland economy, more than half of which comes from events directly supported by TEQ. Events continue to be a major driver of tourism outcomes in Queensland and the variety of offerings continues to be the strength of the state s calendar. In -17, events on the calendar were as varied as the Brisbane International, Blues on Broadbeach, the Julia Creek Dirt and Dust Festival and the Marvel: Creating the Cinematic Universe exhibition at the Gallery of Modern Art. Our Queensland Destination Events Program (QDEP) continues to go from strength-tostrength, supporting growth in a wide range of events across regional Queensland. In -17, the program supported 87 events across the state with grants totalling $2 million and generating 752, 800 visitor nights. In June, the Queensland Government announced a continuation of the four-year funding guarantee of TEQ, securing $100 million per year through to That guarantee allows us to further strengthen our competitive edge and secure long-term partnerships which work towards our strategic goals. Across the -17 financial year, TEQ continued to work with our key partners to further secure Queensland s reputation as Australia s premier tourism and events destination. With the ongoing success of the It s Live! In Queensland events calendar and Connecting With Asia and AAIF, combined with a new strategic marketing approach, TEQ will keep inspiring the world to experience the best address on earth. Leanne Coddington Chief Executive Officer Tourism and Events Queensland 4 ANNUAL REPORT 16/17

5 Acting Chair's statement The coming 12 months will be like nothing Queensland has seen before and will provide an incredibly rare opportunity for our state s tourism industry. In the 2018 Commonwealth Games, we have an amazing opportunity to showcase Queensland to the world while also welcoming as many as 1.5 million spectators to what will be the biggest event in Queensland this decade. The enhancing of Queensland s reputation during the Games will drive tourists to the state long after the closing ceremony, giving us an unprecedented opportunity to take tourism to the next level. Already the event has kickstarted strong investment across Queensland, ensuring the legacy of the Games will continue to benefit the tourism industry for years to come. This investment coupled with new infrastructure presents a great opportunity for an even stronger major events calendar to continue to drive visitation into the future and further unlock Queensland s tourism potential. The industry again grew in -17, now contributing $25 billion and employing 225,000 people directly and indirectly, underpinning its importance to the Queensland economy. Tourism now employs more Queenslanders than mining, agriculture, fisheries and forestry combined and with 68 per cent of tourism nights occurring outside of Brisbane, many of the jobs created and sustained by the industry are in Queensland s regions. The forecast growth from Asia has come to fruition with Chinese visitors now topping 471,000 in the year ending June contributing over $1 billion to the economy. Strong results out of Japan, South Korea and Taiwan again highlighted the importance of the Asian market. TEQ will continue to work to capitalise on this growth by utilising the Connecting with Asia fund to secure new flights into Queensland and expand existing services. The announcement of a three-weekly service by China Southern Airlines into Cairns signalled the first flights secured, and we continue to negotiate with several interested parties across Asia. Once again the It s Live! In Queensland events calendar continues to grow into an asset that is now worth more than $600 million to the Queensland economy. The Battle of Brisbane at Suncorp Stadium in July kicked -18 off with a bang in a year which will also see the Bledisloe Cup, the Rugby League World Cup and the Commonwealth Games all staged in Queensland. The past year also threw up its fair share of challenges and the resilience and determination of residents and tourism operators in the path of Cyclone Debbie in March and April inspired us all. TEQ will continue to work with state and federal governments, RTOs, industry partners and individual operators to ensure Queensland continues to build its reputation as Australia s leading tourism and events destination. With the continuation of the four-year funding guarantee confirmed in the State Budget and the successful implementation of our new strategic marketing framework, TEQ s vision to inspire the world to experience the best address on earth will continue to deliver for the state and the tourism industry in the year ahead. I d also like to pay tribute to our chairman Bob East and thank him for the vision and leadership he provided TEQ during his tenure. We wish him all the best in his new role as chairman of the TA board in the -18 year. Julieanne Alroe Acting Chair Tourism and Events Queensland ANNUAL REPORT 16/17 5

6 About Tourism and Events Queensland Tourism and Events Queensland is Queensland s lead marketing, destination and experience development and major events agency. In partnership with Government, RTOs, industry and commercial stakeholders, we aim to build Queensland s tourism and events industry to foster innovation, drive industry growth and boost visitor expenditure. Our vision Inspiring the world to experience the best address on earth. Our purpose Achieving economic and social benefits for the State by growing the tourism and events industry. INSPIRING THE WORLD TO EXPERIENCE THE BEST ADDRESS ON EARTH through brand, integrated marketing and events in priority domestic and international source markets Queensland s signature experiences and events through quality and innovation showcasing the best of Queensland Our mission We are a consumer-led, experience-focused and destination-delivered organisation that connects people and places like never before through innovation and collaboration with the tourism and events industry. Our role and functions Established by the Queensland Government in December 2012, Tourism and Events Queensland (TEQ) is a statutory body under the Tourism and Events Queensland Act 2012 (the Act) and part of the portfolio of Tourism, Major Events and the Commonwealth Games. The primary functions of TEQ are: 1. to attract international and domestic travellers to travel to and within Queensland through a) the promotion and marketing of Queensland; and b) tourism experience and destination development; and 2. to identify, attract, develop and promote major events for the State that a) contribute to the Queensland economy; and b) attract visitors to Queensland; and c) enhance the profile of Queensland; and d) foster community pride in Queensland; and 3. to work collaboratively with the department and other public sector units and Queensland tourism industry participants to identify opportunities to increase tourism and travel to and within Queensland; and 4. to conduct research into, and analysis of, tourism in Queensland. 6 ANNUAL REPORT 16/17

7 Executive management In -17 TEQ s senior executive team comprised five Group Executives, led by the Chief Executive Officer, Leanne Coddington. Responsibilities of the Chief Executive Officer include: Provide leadership and direction to TEQ staff to deliver on TEQ s objectives; Establish strong relationships with key industry partners, Government and business representatives and deliver strategic benefits to Queensland; Work with the Queensland tourism industry operators and assist them to grow through cooperative and collaborative partnerships; Manage the development and implementation of current and long-term plans and objectives in accordance with the Board s directions to grow Queensland s visitor economy; and Manage the operations of TEQ in compliance with the Act, Board policies, strategic plan and budget. The key areas of focus for each Group Executive are as follows. Global Marketing (Group Executive position vacant as at 30 June ; Michael Branagh commenced 3 July ) Lead the implementation of TEQ s global Marketing Strategy 2025; Identify, showcase and support the development of the Best of Queensland Experiences; and Develop consumer driven activity that delivers increased overnight visitor expenditure for industry. Destinations and Global Partnerships (Group Executive Rick Hamilton) Work in partnership with RTOs and industry to deliver their Destination Tourism Plans, with a particular focus on maximising the opportunity that each destination s hero experiences offer consumers; Lead international source market engagement with trade and industry; Partner with airports, airlines and industry to support aviation route development and increase route capacity; Focus on multi-year strategic trade partnerships to deliver increased visitor expenditure to Queensland s experiences and products; and Manage cross-government projects in partnership with DTESB, State, Local and relevant Federal Government agencies. Events (Group Executive John Drummond Montgomery) Deliver a world-class calendar of events for Queensland, guided by the Events Strategy 2025; and Attract people to experience the best address on earth through optimising the value of Queensland s event calendar and leveraging the competitive advantage provided by Queensland s unique event experiences. Corporate Affairs (Group Executive Megan Saunders) Lead media, corporate communications, ministerial and government relations activities across all areas of TEQ; and Manage effective relationships with key stakeholders, providing effective and timely liaison to support TEQ business activities and raise the profile of Queensland s tourism industry through communications and advocacy. Corporate Services (Group Executive Nick Elliott) Support TEQ s senior management and Board in the delivery of the organisation s operational, strategic, people, research and financial activities; Provide tourism research and insights to TEQ s senior management and Board to monitor industry performance and to identify emerging opportunities and trends; and As the Chief Financial Officer and Board Secretary, manage the organisation s financial activities including reporting and financial planning. Chief Executive Officer Global Marketing Destinations and Global Partnerships Events Corporate Affairs Corporate Services People and Leadership Global Brand Destinations Major Events Ministerial & Government Relations Finance Consumer Marketing International Markets Destination Events Corporate Communications Business Solutions & Technology Experience Engagement & Digital Channels Strategic Partnerships Business Events Legal Destination & Experience Development Stakeholder & Event Experience Strategic Development & Research Event Value Optimisation Planning Event Analytics ANNUAL REPORT 16/17 7

8 Our values TEQ s organisational values support the company s strategic framework, culture and purpose. The values guide employee behaviour and interactions with internal and external stakeholders and provide a framework for achieving TEQ s objectives. Lead together Guided by the Minister and the Board, we are clear on our purpose, direction and priorities and our team is empowered to implement. Locations TEQ s Head Office is located at 30 Makerston Street, Brisbane, with some staff based throughout Queensland and internationally. TEQ delivers a range of initiatives in partnership with Queensland s 13 RTOs through the structure outlined on page 7. Global reach TEQ has a presence in 13 strategically important international markets: the Americas; China; Europe; Hong Kong; India; Indonesia; Japan; Korea; Malaysia; New Zealand; Singapore; Taiwan; and the United Kingdom, Ireland and Nordic. TEQ s international offices are detailed in the directory on page 80 of this report. In addition, TEQ partners on activity in key emerging markets that have been identified to offer growth opportunities for Queensland in the medium to long-term. Agile and responsive We embrace emerging trends and opportunities. To thrive in a competitive industry environment we are proactive, flexible and adaptable. AMERICAS UNITED KINGDOM, IRELAND AND NORDIC London Munich EUROPE One team We work in partnership with our teammates and always act for the good of the whole. Los Angeles Go beyond We are creative, innovative and solutions-driven. We strive for continuous improvement, and make a difference where it really counts for Queensland. 8 ANNUAL REPORT 16/17

9 INDIA Mumbai Beijing Seoul CHINA JAPAN Shanghai KOREA Guangzhou Taipei TAIWAN Hong Kong (SAR) Kuala Lumpur Singapore Jakarta Tokyo SOUTH EAST ASIA Tropical North Queensland Outback Queensland Cairns Townsville North Queensland The Mackay Region The Whitsundays Capricorn Region Gladstone Region Southern Queensland Country Bundaberg North Burnett Fraser Coast Sunshine Coast Brisbane Gold Coast Southern Great Barrier Reef AUSTRALIA QUEENSLAND Brisbane Auckland NEW ZEALAND ANNUAL REPORT 16/17 9

10 Our operating environment Tourism is vital to Queensland s economy, generating $25 billion for the State. Tourism contributes 7.9 per cent of Gross State Product (GSP) and employs 225,000 Queenslanders directly and indirectly. The coming decade will bring enormous opportunities for Queensland s tourism and events industry 1, including the potential to generate over $33 billion in overnight visitor expenditure (OVE) by , supporting more than 100,000 additional jobs in the State s economy. Much of this growth will come from our international markets which by 2025 will represent approximately 33 per cent of total OVE (up from 25 per cent in ). Industry Performance and Targets Queensland's Overnight Visitor Expenditure (OVE), (forecast) $ Billion Totals may not add up due to rounding Total (Actual) International (Actual) Total (Forecast) International (Forecast) Rapid growth in Asian countries, especially China and India, means the Asian middle class is expected to grow from around 500 million to 3.2 billion by By 2025, outbound tourism from the Asia-Pacific region will generate an additional 190 million international arrivals. 4 Asian tourism to Australia is growing at an unprecedented rate, assisted by increasing wealth and favourable economic conditions. Strong growth has also been experienced in key western markets, led by the United States of America, New Zealand, Germany and Canada, underlining the importance of a balanced approach to global markets. 5 The anticipated growth in Queensland s international source markets through to 2025 is highlighted in the following diagram. 1. Source: Tourism Research Australia, State Tourism Satellite Accounts Source: Tourism Research Australia, year ended June. Note p = projected potential based on national-level Tourism forecasts to June Where forecasts were unavailable, forecast growth for all Western or Eastern markets was used to estimate future potential 3. Source: Australia s Jobs Future, 2015, ANZ PwC Asialink Business Services Report 4. Source: Oxford Economics, Tourism Decision Metrics, 5 Source: Tourism Research Australia, 3 year trend to year ending June 10 ANNUAL REPORT 16/17

11 Queensland s Key Source Markets UK and Nordic $529m ($811m) Greater China $1,417m ($3,564m) Europe $430m ($754m) Japan $430m ($793m) South Korea $226.7m ($405m) Americas $502m ($1,009m) India $128m ($327m) Southeast Asia $289m ($494m) Domestic $15.4b ($22.3b) New Zealand $586m ($973m) (2025 potential) YE June OVE Domestic Markets: Intrastate (within Queensland); Interstate (states other than Queensland) Eastern Markets: Greater China (China, Hong Kong and Taiwan), Japan, Southeast Asia (Singapore, Malaysia and Indonesia), South Korea and India Western Markets: New Zealand, United Kingdom, Ireland, Nordic countries, Europe (Germany, Switzerland, Netherlands, Italy and France), Americas (USA and Canada) Source: Tourism Research Australia, Year ending June potential is based on national-level Tourism forecasts to June Where forecasts were unavailable five-year historic growth was used to estimate future potential. Changes in technology and consumer preferences will continue to influence Queensland s tourism and events industry. The Queensland Government has renewed its focus on innovation through the Advance Queensland initiative. The tourism and events industry must continue to innovate and is well placed to take advantage of these opportunities, delivering on jobs and advancing tourism. In 2015, the Queensland Government committed to a four-year funding approach for TEQ. This funding guarantee enables TEQ to enter into multi-year partnerships and take a longer-term view on strategic investment in marketing and events. Through the Tourism Network Funding Program -19, TEQ provides multi-year support to the State s RTOs. Additional funding announced in to continue TEQ s four-year funding guarantee through to provides added certainty to strengthen TEQ s negotiating capacity with commercial partners over the longer term and boosts its ability to acquire and retain high value events with longer planning cycles that will deliver visitation growth. Through the Advance Queensland: Connecting with Asia strategy, TEQ will continue to target key Asian source markets to drive visitor growth and dispersal throughout the State. On 27 June, TEQ entered into an agreement with China Southern Airlines to operate three flights a week direct from Guangzhou to Cairns. These flights were the first secured under this funding package and are expected to commence in December. ANNUAL REPORT 16/17 11

12 Tourism landscape Tourism is vital to Queensland s overall economic prosperity and is the State s third largest export industry. Tourism is currently a $25 billion industry which supports 225,000 Queensland jobs and 54,000 businesses (one in eight Queensland businesses) of which 56 per cent are located in regional Queensland. 6 $ $25 billion economic contribution 7.9% GSP 1 in 10 jobs Industry performance TEQ provides tourism and events research and insights to industry and Government to inform strategic decision-making for tourism growth in Queensland. Primary research is undertaken to better understand consumers perceptions and the needs of Queensland s target markets, as well as the experiences that Queensland can offer to meet those needs. TEQ also leads the analysis and publication of Queensland results from major national tourism surveys including the National Visitor Survey, International Visitor Survey, Overseas Arrivals and Departures and the Tourism Satellite Accounts. Overnight visitor expenditure 7 Total overnight visitor expenditure in Queensland reached $20.6 billion for the year ended June according to Tourism Research Australia s (TRA) international and national visitor surveys. This was a 4.9 per cent increase compared with the same period in the year prior. International visitors increased their spending and contributed a 25.4 per cent share in total overnight visitor spending. The balance, 74.6 per cent, was contributed by domestic visitors, of which Queenslanders contributed a 54.2 per cent share. The total overnight visitor expenditure generated by leisure visitors, the combination of visitors on holiday and those visiting friends and relatives, to Queensland increased 3.6 per cent to $12.7 billion over the year ended June. 1 in 8 businesses 30 Figure 1: Total overnight visitor expenditure in Queensland, Victoria and New South Wales $ Billion FY June 2012 FY June 2013 FY June 2014 FY June 2015 FY June FY June Source: TRA QLD NSW VIC The market share of overnight visitor expenditure across Australian states remained relatively stable during the year. Queensland achieved 22.8 per cent of all overnight visitor expenditure in Australia, ranked second in individual states behind New South Wales. 6. Sources: TRA, State Tourism Satellite Accounts and Tourism Businesses in Australia, June 2012 to June ; Australian Bureau of Statistics, Counts of Australian Businesses, including Entries and Exits, June 2012 to June (ABS Cat. No ). Queensland Government Office of Economic and Statistical Research Overseas exports of goods by industry Source: TRA, National and International Visitor Surveys, year ended June (see Note regarding research data on page 14) Further information on tourism research and insights in Queensland can be located at Please note FY denotes Financial Year 12 ANNUAL REPORT 16/17

13 Domestic Nationally, $62.6 billion was spent by domestic overnight visitors during the year, of which a record $15.4 billion was spent in Queensland. Figure 2: Domestic overnight visitor expenditure in Queensland, Victoria and New South Wales $ Billion FY June 2012 FY June 2013 FY June 2014 FY June 2015 FY June FY June Source: TRA QLD NSW VIC International International overnight visitor expenditure in Australia reached $27.9 billion, including $5.2 billion spent in Queensland. Figure 3: International overnight visitor expenditure in Queensland, Victoria and New South Wales $ Billion FY June 2012 FY June 2013 FY June 2014 FY June 2015 FY June FY June Source: TRA QLD NSW VIC With more than one third of all international travellers to Australia visiting Queensland, international visitation remained strong. International overnight visitor expenditure in Queensland reached a record $5.2 billion in the year ending June. China had the highest expenditure at just over $1 billion, followed by New Zealand at $586.5 million, Japan at $430.3 million, the United Kingdom at $421.6 million and the United States at $365.4 million. ANNUAL REPORT 16/17 13

14 Figure 4: Total overnight visitor expenditure in Queensland regions, year ended June 7 Brisbane Gold Coast Tropical North Qld Sunshine Coast SGBR Townsville SQC Whitsundays Outback* Mackay* Fraser Coast 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 $ Million *Due to sample size, data for the Outback and Mackay regions reflect an average international expenditure over three years. Figure 5: International and domestic overnight visitors to Queensland regions, year ended June 7 Note regarding research data International Visitor Survey (IVS) and National Visitor Survey (NVS) In 2014, TRA moved to a new methodology for the NVS that included mobile phone interviewing as part of a dual frame overlap survey. This initiative was part of TRA s continuous improvement program. The inclusion of mobile phone users ultimately delivers greater domestic tourism data accuracy. Advancements in the quality of mobile telephone data sets, which were implemented in the NVS build process in late 2015, caused anomalies in the growth rate of some components. This has required back-casting to align the data and allow for the continuation of the time series. Moving forward, the quality of data that the NVS produces will be more accurate as it better reflects the Australian resident population and phone ownership. The back-cast results have seen a change in volume estimates in 2014 and Results for other years have not been affected, The average growth rate over the five-year trend has not changed. However, due to the volume changes in 2014 and 2015, growth rates previously published will, in most cases, be reduced in line with the long-term trend. Figures in the market share tables may sum to more than 100 per cent as visitors may have visited more than one state during their trip. Brisbane Gold Coast Tropical North Qld Sunshine Coast SGBR Townsville SQC Whitsundays Outback Mackay Fraser Coast 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Source: TRA Thousands (000) Domestic International Southern Great Barrier Reef (SGBR) incorporates the Capricorn, Gladstone and Bundaberg North Burnett regions. Southern Queensland Country (SQC) incorporates Toowoomba, Southern Downs, Western Downs and the South Burnett. 14 ANNUAL REPORT 16/17

15 Queensland brand health The annual Nielsen study into Queensland s brand health 8 for -17 showed the Queensland brand performed well compared with competitors. Only around one in five of the world s brands achieve a brand equity 9 score of more than three out of a ten-point index. In -17 the Queensland brand achieved a score of 2.5 nationally, and was stable year-onyear. 10 By comparison, the next strongest brands in the competitive set were New Zealand and Europe, which scored 1.7 and 1.5 respectively, and both were also stable compared with The Queensland brand also out-scored similar international destinations such as Hawaii, Japan, Fiji, and Bali, as well as domestic destinations such as Melbourne and Sydney. Strategic risks Queensland s tourism industry operates in a highly competitive national and international environment. TEQ conducts an ongoing risk identification and assessment process, classifies risks as either strategic or operational, and mitigates accordingly. Significant strategic risks include: Variable economic conditions within Australia and in key source markets that can impact visitor numbers, expenditure and average length of stay; Competition from other national and international event destinations that impacts TEQ s ability to secure and develop events; Changing visitor expectations and social and environmental impacts that affect the appeal of Queensland s tourism and events products, experiences and destinations; and Crises and unexpected events, including adverse weather events, that curtail tourism demand and influence consumer perception. Looking forward -18 TEQ has identified the following strategic priorities to deliver our objectives in -18: Deliver and promote a world-class events calendar; Market the best address on earth; Destination and experience development; Optimise the tourism value of the Gold Coast 2018 Commonwealth Games (GC2018); Focus on Asia; and Aviation access and strategic partnerships. Key focus areas for -18 will include: Showcasing Queensland s tourism and events experiences to key domestic and international markets through TEQ s experience-based Marketing Strategy Marketing activity will be delivered under the five pillars of: Reef, Islands, Beaches; Natural Encounters; Adventure and Discovery; Queensland Lifestyle, Culture and People; and Events. TEQ will work with TA, RTOs and industry to identify leverage opportunities under this strategy; Marketing the Great Barrier Reef and its experiences to key domestic and international markets with a focus on the Great Barrier Reef s unique-selling points, such as size and use, diversity of wildlife and conservation. TEQ will also work to strengthen key strategic partnerships with stakeholders to promote best management practices and build Great Barrier Reef resilience; Strengthening Queensland s events calendar through attracting and securing major events for Queensland, strategically investing in events that deliver the greatest benefits across Queensland, and maximising tourism opportunities associated with the GC2018. TEQ remains committed to securing and staging high value business events for Queensland such as the Infinitus China 2018 Incentive Tour and supporting regional tourism through the Queensland Destination Events Program (QDEP); Maximising opportunities for Queensland under the $33.5 million Advance Queensland: Connecting with Asia Strategy and the AAIF in partnership with DTESB, RTOs, industry, airports and airlines; Working with key partners including the Gold Coast 2018 Commonwealth Games Corporation (GOLDOC), TA, the City of Gold Coast and Gold Coast Tourism to optimise the tourism value of GC2018. TEQ s focus will be maximising interstate and international visitation, length of stay and overnight visitor expenditure pre, during and post GC2018. Key activities domestically and internationally will include trade and media engagement, digital marketing and public relations activity, and consumer marketing activities delivered in conjunction with key commercial partners and via the It s Live! in Queensland events marketing platform; Continuing to grow TEQ s digital footprint which currently includes an engaged audience of more than 3.8 million consumers globally across e-newsletter and social media platforms; Strengthening existing and identifying new strategic partnerships with airlines, travel trade and industry and delivering activities under established partnerships; Supporting TEQ s partnership with Queensland s 13 RTOs through the Tourism Network Funding Program -2019; Delivering destination and experience development activities including reinforcing Queensland s competitive position through the Best of Queensland Experiences Program, encouraging and supporting the tourism industry to innovate and deliver quality visitor experiences, and supporting Queensland s RTOs; and Implementing activities to strengthen the tourism potential of the international education market in Queensland. During -18 TEQ will continue to work with Trade and Investment Queensland (TIQ) to assist in implementing its International Education and Training Strategy to Advance Queensland The Nielsen Company, Brand Health, July - Australian residents in Queensland, Sydney and Melbourne 9. The brand equity index (BEI) is calculated based on consumers consideration of: 1) their favourite destination brand 2) brands they would recommend, and 3) willingness to pay higher prices. Source: The Nielsen Company, Brand Health, July. 10. In the Queensland competitive destination set was updated to include six new competitor destinations. The old and new competitive sets were run in parallel in, and for the new competitive set has been adopted. As such, there is a break in the series affecting Queensland BEI figures published prior to. ANNUAL REPORT 16/17 15

16 Our performance Queensland Government objectives for the community TEQ contributes to the Queensland Government s objectives for the community of creating jobs and a diverse economy; protecting the environment; and building safe, caring and connected communities by: promoting Queensland s iconic experiences to key domestic and international markets tourism experience and destination development strengthening Queensland s events calendar through strategic event acquisition providing leadership to and working in partnership with Queensland s regional tourism organisation (RTO) network and industry. During -17, TEQ delivered activity to progress the priorities outlined in the Minister s Statement of Expectations including delivering the new experience marketing approach; continuing market research on consumer behaviour and travel preferences to inform the new consumer segmentation model; leading the acquisition, development and promotion of events; supporting the industry in bidding for incentive travel to Queensland; securing more international aviation access through the Advance Queensland: Connecting with Asia Strategy -20; implementing the Queensland Asia Tourism Strategy -2025; and leveraging the tourism potential of the international education network. Objectives and performance indicators TEQ focused on four key objectives in -17, as outlined in the Strategic Plan: 1. Attract visitors to Queensland, generating overnight visitor expenditure (OVE) 2. Contribute to the Queensland economy 3. Enhance the profile of Queensland 4. Foster community pride in Queensland. These were delivered through: o Marketing and promoting tourism in Queensland; o o Tourism experience and destination development; and Working to identify, attract and promote major events. Performance indicators are arranged into two groups based on the degree of influence TEQ has in affecting the outcome: Service delivery measures Overnight visitor expenditure generated by events within the portfolio Direct and incremental spending generated by events within the portfolio Visitors to Queensland generated by events within the portfolio Direct visitor nights generated by events within the portfolio Publicity and promotional value generated by activities Value of collaborative support Efficient leverage of regional and strategic partnership investment Industry outcome measures Economic impact and job creation Total overnight visitor expenditure Queensland s share of Australian overnight visitor expenditure (total, leisure and holiday visitors). 16 ANNUAL REPORT 16/17

17 Service areas and service standards TEQ committed to deliver seven service standard targets in the -17 Queensland State Budget Service Delivery Statements. Results against each target are detailed in the Annual Performance Statement -17. Service area objective To achieve economic and social benefits for the State by growing the tourism and events industry in a partnership between industry and Government. Service area description TEQ s core functions are marketing, event acquisition and experience development. Table 4: Annual Performance Statement -17 Service area: Tourism and Events Queensland Service standards Effectiveness measures Overnight visitor expenditure generated by events within the TEQ portfolio Direct visitor nights generated by events within the TEQ portfolio Direct and incremental spending generated by events within the TEQ portfolio Visitors to Queensland generated by events within the TEQ portfolio Publicity and promotional value generated by TEQ activities Notes -17 Target -17 Actual 1 $300m $349.7m 1 1,750,000 1,985,088 1 $375m $415.2m 225, ,351 2, 3 $220m $293m Value of collaborative support 4 $19m $32m Efficiency measure Efficient leverage of regional and strategic partnership investment 5 1:1 1:1 Notes 1. Recurring events, such as the Gold Coast Airport Marathon, World Science Festival in Brisbane, V8 Supercar races in Townsville and Gold Coast and one-off blockbuster events such as, the IRONMAN 70.3 World Championships on the Sunshine Coast and the TOTAL BWF Sudirman Cup on the Gold Coast contributed significantly to the strong results against targets in This measure does not include the publicity generated by TEQ s digital marketing activities. TEQ is working to develop a new measure/service standard for inclusion in future Service Delivery Statements that captures TEQ s increasing efforts in generating publicity through social media and other online content. 3.. TEQ-led publicity associated with Cyclone Debbie recovery, events international broadcast and media outcomes of the Sudirman Cup, digital broadcast activity in Asia and special interest publications in Europe contributed significantly to the strong publicity outcome for -17 and far exceeded expectations. 4. Collaborative value includes all direct, indirect, contra and in-kind partner support for tourism and event marketing, destination and experience development projects and major events. The - 17 actual result exceeded the target due to higher than forecast indirect and in-kind support from strategic tourism, aviation and event partners. 5. This service standard measures the ratio of partner investment to the investment made by TEQ in regional and partnership activities. ANNUAL REPORT 16/17 17

18 Strategic Priorities Highlights -17 Deliver and promote a world-class events calendar Queensland events are crucial to delivering measurable benefits for the State s economy and its regional communities. Supporting events in Queensland helps attract visitors, increase visitor spending, encourage dispersal in region and support local jobs. The variety in Queensland s events offering is key to inspiring the world to experience the best address on earth. TEQ is committed to delivering and promoting an annual world-class events calendar for Queensland via the It s Live! in Queensland platform. Queensland s calendar of events is estimated to be worth $600 million in economic impact for the state. The calendar works as a sustainable high-value asset for the State and is guided by TEQ s Events Strategy 2025, which provides a framework to ensure events align with TEQ s overarching objectives and that investment is maximised to ensure the best tourism outcomes. The Events Strategy 2025 is also designed to meet the objectives as stated in the Act: contribute to the Queensland economy; attract visitors to Queensland; enhance Queensland s profile; and foster community pride. To optimise the value of these events and ensure Queensland remains a premier events destination, TEQ works in partnership with industry, RTOs and event organisers across the State. TEQ invests in three different types of events in Queensland - major, business and destination events - which collectively play a vital role in attracting visitors to Queensland and supporting the state's tourism industry. In -17, TEQ supported 49 major events, 87 destination events, and 16 business events, growing TEQ s portfolio of events by almost ten per cent from the previous financial year to generate $349.7 million in overnight visitor expenditure, $415.2 million in direct and incremental spending, million direct visitor nights and attracting 242,350 visitors to Queensland. Almost half of the events that TEQ invests in are held outside of the South East Queensland corner, promoting the unique tourism opportunities on offer in regional Queensland. Key events contributing to this success include the Gold Coast Airport Marathon, Supercars events in Townsville, Ipswich and the Gold Coast, the IRONMAN events in Noosa, Cairns and Mooloolaba, and the Blues on Broadbeach Music Festival. The latter is one of the largest free music festivals in Australia, which generated more than $20 million in direct spending and attracted over 13,000 interstate and international attendees in. 18 ANNUAL REPORT 16/17

19 Case study More than 3,600 competitors from 83 countries descended on Mooloolaba in September for the IRONMAN 70.3 World Championship, bringing with them over 4,000 supporters. This was the first time the Championship was held in the Southern Hemisphere, and it attracted the largest IRONMAN 70.3 Championship competitor field ever. It was a huge success for tourism in the region with attendees spending an average of seven nights away from home to attend the event. ANNUAL REPORT 16/17 19

20 What types of events does TEQ invest in? Destination Events The Queensland Destination Events Program (QDEP) is an event investment program designed to create a growth pathway for events across Queensland that play a role in attracting visitors to a destination and promoting the destination s visitor experiences. In -17, TEQ allocated funding via three competitive funding rounds. In -17, TEQ invested $2 million in regional events and supported 87 events across Queensland which generated 752,800 visitor nights. Business Events TEQ remains committed to securing business events through its annual funding support for the six Queensland Convention Bureaux as well as the Acquisition and Leveraging Fund. Queensland Convention Bureaux Funding for the Queensland Convention Bureaux provides additional support to market destinations to attract business event opportunities. Six Queensland Convention bureaux received funding through TEQ in -17, with each bureau required to match the funding provided dollar-for-dollar. Acquisition and Leveraging Fund The Acquisition and Leveraging Fund allows Queensland convention bureaux, convention centres, professional conference organisers and international associations to apply for financial support to assist in securing international association business events and international incentive group events for Queensland. In -17, 16 business events were successfully secured and 16 were held, which welcomed more than 15,000 delegates to Queensland. Major events Queensland is one of Australia s leading destinations for major events, with our unique destinations and stunning backdrops adding to an unmatched consumer experience. In -17 Queensland supported 49 major events, including sport, lifestyle, and arts and culture events, which have been pivotal in attracting visitors to Queensland and supporting the state's tourism industry. TEQ classifies major events as either one-off or recurring sporting, lifestyle, entertainment, cultural or design events that have the potential to deliver significant value against the organisation s objectives. Of the total benefits delivered by all TEQ supported events in -17, major events accounted for: Almost 220,000 visitors to Queensland; More than 1.73 million direct visitor nights; and Direct and incremental spending of $395 million for Queensland, a growth of $30 million from the previous financial year. 20 ANNUAL REPORT 16/17

21 Gold Coast 2018 Commonwealth Games The Gold Coast 2018 Commonwealth Games (GC2018), to be held in April 2018, will be the most significant sporting event in Australia this decade, providing Queensland with the opportunity to generate economic and social benefits for many years to come. It is anticipated the Commonwealth Games will create up to 16,000 full-time equivalent jobs and inject $2 billion into the economy. 11 Through attracting worldwide public attention, the Games will increase interstate and international visitation and enhance Queensland s brand as a tourist destination. Using a cross-organisation approach, TEQ is working to optimise the tourism value of GC2018 for Queensland in close partnership with the Gold Coast Commonwealth Games Corporation (GOLDOC), City of Gold Coast, Office of the Commonwealth Games, TA, and RTOs including Gold Coast Tourism, Tourism Tropical North Queensland, Townsville Enterprise and Brisbane Marketing, to leverage the Games to generate overnight visitor expenditure, enhance the brand image of the Gold Coast and Queensland globally, and leave a marketing legacy for other future major events. Activity undertaken by TEQ is geared to deliver upon four key objectives: maximise interstate and international visitation to Queensland for GC2018; maximise interstate and international visitor length of stay and Overnight Visitor Expenditure (OVE) pre, during and post GC2018; enhance the awareness and perception of Queensland as a tourism and events destination to maximise the legacy benefits of GC2018; and raise the profile of Queensland s event hosting capability to secure high value events for Queensland post GC2018. TEQ-led activity in -17 spanned several key areas including domestic and international media engagement; promotion of GC2018 via the It s Live! in Queensland campaign and at TEQ-supported events; delivering marketing activity with TA including a Queensland experience activation in the United Kingdom to leverage the launch of the Queens Baton Relay (March ); and trade engagement promoting GC2018 at numerous trade and consumer shows including the Australian Tourism Exchange in Sydney. Having established a strong strategic partnership, TEQ has worked closely with GOLDOC on the planning and execution of marketing campaign activity into key interstate and international markets. This partnership has facilitated the authentic integration of Queensland tourism experiences into the overall GC2018 event experience offering, thus broadening the appeal of GC2018 to domestic and international visitors and encouraging athletes, officials and media to extend their stay in Queensland beyond the Games. TEQ continues to provide strategic advice on tourism and event related matters across numerous GC2018 forums and working groups led by stakeholders including GOLDOC, Office of the Commonwealth Games and City of Gold Coast. 11. Source: Griffith University, The Economic Impacts of the Gold Coast 2018 Commonwealth Games, August ANNUAL REPORT 16/17 21

22 Market the best address on earth In, TEQ unveiled a new brand with an exciting new direction and vision for Queensland, helping to better showcase Queensland within Australia and globally. Extensive marketing research helped to inform a more targeted and focused approach, with Queensland featured as the master brand, supported by the promotion of signature experiences that leverage relevant destinations. In this way the new brand presents a stronger and more competitive platform to inspire, engage and attract more visitors to Queensland. As part of this rebranding, five experience pillars were identified to create the best competitive advantage for Queensland: Reef, Islands and Beaches Natural Encounters Adventure and Discovery Events Lifestyle, Culture and People. TEQ works collaboratively with destinations across Queensland in the implementation of this experience-based strategy, which also provides opportunities for destinations and industry partners to leverage activities further, capitalise on the state s growing tourism industry and increase brand equity and market share for Queensland. The phased roll out of the new brand through the I know just the place campaign, commenced in late November in domestic and New Zealand markets and in January across Europe, the United Kingdom and the Americas. Activity under the campaign focuses on showcasing Queensland s unique tourism offerings told through the words of the people who run them. Activity included print, television, outdoor, digital and cinema advertising. The most recent campaign tracking study, conducted by Nielsen in June, showed the I know just the place campaign performed above Nielsen s global norms on measures of advertising effectiveness such as communication, persuasion, empathy and impact; and nearly three quarters of respondents indicated they intend to visit Queensland in the next 12 months. This is above the benchmark of 71 per cent set prior to the launch of the I know just the place campaign The Nielsen Company, Campaign Tracking Study, July - Australian residents in Brisbane, Sydney and Melbourne 22 ANNUAL REPORT 16/17

23 Great Barrier Reef One of Queensland s most valuable and iconic tourism experiences is the Great Barrier Reef, a vast and diverse natural asset with around 2300 kilometres / 1400 miles of living coral. The Great Barrier Reef is a living treasure to protect and share with visitors from around the world. It is Queensland s most valuable natural tourism asset with around two million visitors experiencing it every year. In June, TEQ welcomed the Deloitte Access Economics report which showed that the Great Barrier Reef contributes $6.4 billion to the Australian economy and supports over 64,000 jobs. TEQ plays a key role in marketing the Great Barrier Reef and its experiences. Activity is delivered in partnership with industry and TA and focuses on promoting the Great Barrier Reef s unique-selling points, such as size and use, diversity of wildlife and conservation to key domestic and international markets. TEQ also highlights the Great Barrier Reef as one of the five experience pillars, Reef, Islands and Beaches, under the Queensland brand, supported by extensive media promotion and the development of key marketing products. Key highlights from -17 include: o o o partnering with TA and industry to deliver a global media familiarisation program with ten key media representatives from the United Kingdom, Europe and New Zealand. The familiarisation program took place during April and May and focused on connecting media with sources of truth on reef health. delivering the Great Barrier Reef ATE Talks event held on Tuesday, 16 May at the Australian Tourism Exchange in Sydney. Over one hundred international travel buyers and media and tourism operators attended. partnering with TA and the Great Barrier Reef Marine Park Authority at the Australian Tourism Summit in United States of America for the The Future of Travel event. TEQ participated in a panel discussion about sustainability which was moderated by Costas Christ, National Geographic Traveller Editor-at-Large and included a live cross to Reef HQ in Townsville. TEQ works to strengthen key strategic partnerships with stakeholders including the Great Barrier Reef Marine Park Authority, the Great Barrier Reef Foundation and the Citizens of the Great Barrier Reef on a range of industry initiatives to promote responsible and sustainable management practices and build Great Barrier Reef resilience. TEQ recognises the important role that the tourism industry plays to advocate for the Great Barrier Reef and promote world leading best management practices of this highly treasured natural asset to protect it for future generations. Currently tourism dollars contribute towards protection and management of the Great Barrier Reef. For example, every person who visits the Great Barrier Reef with a commercial operator currently contributes to sustaining the Reef through an Environmental Management Charge. ANNUAL REPORT 16/17 23

24 Tropical Cyclone Debbie To assist the tourism industry in its recovery efforts following Tropical Cyclone Debbie, TEQ has continued extensive marketing activity through its brand to welcome back travellers to the impacted regions. Central to this marketing campaign was the key message that Queensland is still the best place in Australia to holiday and that the best thing visitors can do to support the industry is to holiday in Queensland. Major domestic and international campaign activity was delivered in partnership between TEQ and TA, featuring print, digital and television commercials to encourage travellers to holiday in Queensland. The campaign activity included support for impacted areas such as the Whitsundays and sent a clear message to consumers that Queensland is ready to welcome visitors. As part of the recovery marketing effort, TEQ partnered with Flight Centre to deliver marketing activity with a focus on cyclone-affected areas. TEQ also provided additional funding to Tourism Whitsundays, Capricorn Enterprise and Mackay Tourism Limited to support their marketing efforts post-cyclone. Overall, a total 99 pieces of media coverage and 90 pieces of content were achieved throughout the campaign. TEQ s most recent campaign tracking study, conducted by Nielsen in June 9, showed in total, 65 per cent of respondents agree or strongly agree that Queensland has recovered from Tropical Cyclone Debbie and the subsequent flooding. Destination and experience development TEQ works in partnership with RTOs, the Queensland Tourism Industry Council (QTIC) and industry to ensure Queensland experiences deliver on consumer expectations. TEQ focuses on promoting the experiences that have the strongest potential to drive visitation and grow Queensland s share of overnight visitor expenditure (OVE). Developed during -17, TEQ s Experience Framework guides the implementation of the organisation s marketing direction, particularly with regards to consumer messaging and maximising Queensland s competitive advantage. Based on consumer research and competitor analysis, the framework identifies five key experience pillars and a range of supporting Hero Experiences that reflect the heart and soul of the Queensland story and represent where Queensland has a competitive advantage. TEQ s experience marketing approach is being implemented through activity focusing on relevant Hero Experiences that have the best potential to drive visitation and expenditure from our target market segments. Other key experience development activity undertaken in -17 included: developing the Best of Queensland Experiences program (to be launched in -18) which will identify the best of the best experiences across Queensland; working with TA to leverage and promote Queensland s key experiences internationally through TA s Signature Experiences of Australia program; leading an Aboriginal and Torres Strait Islander Experience Development tour with ten emerging businesses and representative organisations; and developing a storytelling toolkit for Queensland tourism operators, and facilitating ten workshops and up to 80 mentoring sessions across Queensland; and working with Tourism Tropical North Queensland to market indigenous tourism offerings globally, build capacity amongst indigenous tourism operators and develop the Queensland Aboriginal and Torres Strait Islander Experiences Guide for travellers. 8. The Nielsen Company, Campaign Tracking Study, July - Australian residents in Brisbane, Sydney and Melbourne 24 ANNUAL REPORT 16/17

25 ANNUAL REPORT 16/17 25

26 Focus on Asia Over the past decade, the importance of Asian travellers to Queensland and Australia has grown significantly and is projected to continue this growth. A strategic priority for TEQ is maximising the growth opportunities out of Asia and promoting Queensland as Australia s leading destination for Asian travellers. To ensure Queensland is in the best position to capitalise on this growth and better meet the needs of Asian travellers in, TEQ, in partnership with the Queensland Government and in consultation with various stakeholders, developed the Queensland Asia Tourism Strategy based on extensive research and insights, to maximise Queensland s competitive position with Asian travellers, drive sustained growth in Queensland s tourism industry and deliver jobs in regional Queensland. Key targets as part of this strategy include increasing overnight visitor expenditure from Asian markets to $6.8 billion by 2025, supporting up to 30,000 additional jobs. The strategy forms a core component of the Queensland Government s overarching Advancing Queensland: Connecting with Asia Strategy. Under this strategy TEQ works closely with industry to identify and pursue new opportunities that drive tourism growth from Asia through the Queensland Government s $33.5 million Advance Queensland: Connecting with Asia Fund. A recent highlight is the landmark agreement with China Southern Airlines, led by TEQ in partnership with key stakeholders, that will see three flights a week direct from Guangzhou to Cairns, the first yearround service by a Chinese airline into Cairns. This agreement is set to deliver $90 million into the Tropical North Queensland region. Partnerships Strategic partnerships To achieve the best tourism outcomes for Queensland, TEQ recognises the importance of developing key strategic partnerships that enable close collaboration across industry and maximise opportunities to grow overnight visitor expenditure through showcasing Queensland experiences to key target markets. TEQ collaborates with a range of partners including TA, RTOs, tourism industry operators and associations, state and local government, commercial partners, airlines and industry-related tourism associations to drive tourism outcomes for Queensland. TEQ has developed a range of strategic commercial agreements with various stakeholders including Queensland s thirteen RTOs, QTIC, a number of airlines and other tourism industry partners, which open up extensive opportunities for the state. Another key achievement in 17 was the signing of a two-year agreement (-2019) with key distribution partner Utour, a private travel agency based in China, designed to enhance the promotion of Queensland s destinations and experiences to Utour s significant customer base of over 1.5 million customers each year. TEQ also successfully delivered two campaigns with Mafengwo, China s largest online travel social platform, as part of it s two-year agreement ( 18). The agreement enables TEQ to reach the growing online travel market in China and provides the opportunity to showcase Queensland product on the site. The first campaign focused on promoting the Gold Coast and Cairns and Great Barrier Reef regions, in conjunction with the Hong Kong Airlines service to these destinations, and the second campaign focused on promoting Brisbane, in conjunction with the launch of China Eastern Airlines service from Shanghai to Brisbane, which launched in December. In addition to the Connecting with Asia Fund activity, TEQ worked in partnership with DTESB, RTOs, airports and industry members to secure new, and expand existing, routes into Queensland from domestic markets and key and emerging international markets under the $10 million AAIF. Recent highlights include: Tigerair launching a service from Melbourne to Townsville. The service, which commenced on 23 June, is delivering better connections to regional Queensland and is expected to inject an additional $12.5 million in overnight visitor expenditure and 28,000 additional seats into the region each year; and Qantas commencing a three times weekly service on the Christchurch Brisbane route in June. During -17 the route delivered an additional 27,000 seats and an estimated $11 million in overnight visitor expenditure. The Queensland Government s AAIF also provides opportunities to secure new and increased aviation business and routes into Queensland from a number of markets, including Asia, an example being the 16 Jin Air seasonal services between Seoul and Cairns in 17. TEQ is continuing to work with the industry to identify ongoing opportunities with the aviation industry that encourage new routes, increase aviation capacity into Queensland from across Asia, and support growth in Queensland s tourism industry. 26 ANNUAL REPORT 16/17

27 Regional partnerships In -17, $7 million was invested in the RTO network through the Tourism Network Funding Program -19 for the purposes of delivering marketing and development activity, as well as supporting some operational costs of the RTOs. The annual investment of $7 million is to be matched by local government and/or other industry partners, thereby doubling the efforts for the destinations and creating a total resource of $42 million over three years. TEQ hosted 13 Conversations with Industry forums across Queensland, attracting over 900 attendees from across the sector. The forums are a key opportunity for local tourism operators and industry to connect with TEQ, to strengthen collaboration with industry, enhance understanding of industry needs, issues and opportunities, and discuss strategies to grow tourism and events in Queensland destinations. These sessions provide tourism businesses with an opportunity to meet representatives from TEQ, TA, RTOs, DTESB and QTIC. DestinationQ and other Government priorities DestinationQ is an annual forum delivered in partnership with the Queensland Government and tourism industry based on three core principles, Invest, Excel and Grow. It is a unique platform for industry to engage with the Queensland Government and identify new opportunities to continue growing Queensland s tourism market as well as plan for the future. In -17, the forum was held in Mackay in October, attracting more than 280 stakeholders. TEQ supported the delivery of a range of actions under Destination Success: the 20-year plan for Queensland Tourism in -17, in collaboration with Government and industry. Further information regarding DestinationQ and the 20-year plan is available at destq.com.au. TEQ actively participates in the Australian Standing Committee on Tourism (ASCOT) and Tourism Ministers Meeting process. In addition, TEQ contributes to intergovernmental groups that focus on tourism established under the National Long Term Tourism Strategy which aims to increase the supply and quality of Australian tourism product and make the industry more resilient and competitive. ANNUAL REPORT 16/17 27

28 Corporate governance Under the Tourism and Events Queensland Act 2012, the Chairman and board are appointed by the Governor in Council and are responsible to the Minister for Education and Minister for Tourism, Major Events and the Commonwealth Games. As at 30 June, TEQ s board had nine members including the Director-General of the DTESB. Members are appointed in accordance with section 20 of the Act, with the Governor in Council having regard to the person s experience and expertise in business, financial management, and promoting and staging events, and their knowledge of the tourism industry. The Board is to consist of the CEO (Director-General) of DTESB and at least eight other members. A Board member holds office for a period of not more than three years, and a member may be appointed for no more than two consecutive periods. TEQ s Board is responsible for the overall performance of the organisation. The Board is to ensure TEQ performs its functions in a way that is appropriate, effective and efficient, forming committees as appropriate. Duties and responsibilities of the Board include: Ensuring TEQ s strategic direction is aligned to the needs of industry and the objectives of the Government; Conducting meetings of the members (including its committees) and the affairs of the organisation having full regard for the best corporate governance practices; Agreeing performance targets and monitoring performance; Approving the strategic direction and related objectives for TEQ; Considering and approving the annual budget, as proposed by management, ensuring that appropriate resources are available to achieve the business objectives; Ensuring business risks are identified and approve systems of risk management, regulatory compliance, control and related policies to manage those risks; Monitoring the financial performance of the organisation, and reviewing and approving the annual financial statements; and Determining and approving the level of authority to be delegated to the Chief Executive Officer and management. Board performance Each year the Board and its committees conduct an evaluation of their performance, as part of their commitment to the ongoing development of both individual members, the Board, and the committees as a whole. Between Board meetings, there is continuing contact between the Chairman and Chief Executive Officer to discuss major policy and strategic matters, especially when such matters are the subject of Board interest, or are likely to become so. Regular Board papers inform Board members of current and forthcoming strategic issues and other matters relevant to TEQ's operations and performance, including financial performance. 28 ANNUAL REPORT 16/17

29 Board committees To foster good corporate governance and for the Board to focus on strategy and performance management matters, the Board delegates certain duties to Board committees. 1. Events Committee The role of the Events Committee is to assess and consider event investment opportunities and make recommendations to the Board. The Events Committee was formed in December 2012 and meets ahead of Board meetings. Six Events Committee meetings were held in 17. The Committee members included Prof Judith McLean (Chairman), Gary Smith (Member), Paul Donovan (Member) and Karen Hanna-Miller (Member). The Chief Executive Officer, Group Executive Events and relevant TEQ staff attend the events committee meeting as requested. 2. Audit and Remuneration Committee The Audit and Remuneration Committee assists the Board in fulfilling its corporate governance and oversight responsibilities in regard to: The reliability and integrity of financial information for inclusion in TEQ s Annual Report; Compliance with legislative, regulatory, contractual, policy, industry standards, and good governance principles; The integrity of TEQ s internal control framework; The Committee regularly reports to the Board on its activities and recommendations. During the year, the Committee reviewed and observed the terms of the Audit and Remuneration Committee Charter and the Internal Audit Charter in line with Queensland Treasury s Audit Committee Guidelines. In addition, the Committee tracked the implementation of agreed internal, external and performance audit recommendations. Four Audit and Remuneration Committee meetings were held in 17. The Committee members included Gary Smith (Chairman), Julieanne Alroe (Member) and Anna Guillan (Member). The Chief Executive Officer, financial management staff and internal and external auditors attend Audit and Remuneration Committee meetings as requested by the Committee. The Committee also holds discussions with the auditors without management attending. 3. Contestable Grants Committee The role of the Contestable Grants Committee was to consider and approve the successful contestable grant project applications received from the RTO Contestable Grants Assessment Committee, and provide recommendations to the TEQ board, which were subsequently provided to the Minister for noting and announcement. The RTO Contestable Grant program ceased in The Committee did not meet in 17 and the Committee was dissolved by the Board at the October meeting. Safeguarding the independence of the external and internal auditors; and Ensuring that appropriate remuneration policies are designed to meet the needs of TEQ and to enhance corporate and individual performance. ANNUAL REPORT 16/17 29

30 Internal audit Internal audit advises all levels of management and the Audit and Remuneration Committee on TEQ s internal control systems and management of business risk. The internal audit function is responsible for: Assisting executives with risk management through the provision of advice and assurance; Developing: - a plan that is based on assessed business risks and objectives and which is flexible enough to meet changing business needs; and - resourcing arrangements that will cope with special requests; Providing regular progress reports to management and the Audit and Remuneration Committee; Ensuring internal audit remains effective, credible, productive and focused on those areas of most significance to the corporation; Working with management to challenge and improve established and proposed practices and put forward ideas for improving processes; Providing an appropriately skilled team supported, where necessary, by specialist expertise; Maintaining an open relationship with the external auditors; and Fostering a culture of working with management towards agreed solutions. Internal audit works with management and the Audit and Remuneration Committee to align its audit program with TEQ s strategic risk profile. During the year: Internal audit operated under an approved charter that is consistent with relevant audit and ethical standards; Internal audit worked in accordance with the strategic plan; Systems were in place to ensure the effective, efficient and economical operation of the function; The internal audit function was independent of management and the external auditors; The internal audit function had due regard for Queensland Treasury s Audit Committee Guidelines; and Internal audits were conducted in the areas of contestable and core grant acquittals, major contract governance, cloud computing and shadow IT, procurement practices, and foreign exchange management. Risk management TEQ has a risk management framework, including a risk management policy and a risk register owned by the TEQ Board. Senior management regularly review the risk register and TEQ seeks to continuously improve its approach to identifying and managing risk. The Audit and Remuneration Committee is responsible for reviewing and reporting to the Board with regard to TEQ s risk management framework, liaising with management to ensure there is a common understanding of the key risks to, and for, TEQ, reviewing the effectiveness of processes for identifying and escalating strategic risks, and assessing and contributing to the audit planning processes relating to the risks and threats to TEQ. External scrutiny Each year, an external audit is conducted of TEQ s consolidated financial reports and the financial statements of controlled entities. The Queensland Audit Office issued unqualified audit reports for the: TEQ consolidated financial statements for -17 on 30 August ; TEQ Employing Office financial statements for -17 on 30 August ; and Gold Coast Events Management Ltd financial statements for -17 on 30 August. There were no material issues identified by external audit in ANNUAL REPORT 16/17

31 Board meetings During the year six board meetings were held. No special board meetings were held. Two of the six meetings were held in regional areas in order for Board members to connect and engage with RTOs, stakeholders and the local tourism industry. While in region, Board members met with local industry to discuss issues and challenges they are facing and received feedback from tourism operators to help inform their decision-making. TEQ Board meetings were held in the Sunshine Coast (October ) and the Whitsundays (June ) during 17, and the Board plans to continue hosting further meetings in regional areas in 18. Four meetings were held in Brisbane, and the Board engaged with industry stakeholders in Brisbane as part of its August meeting. The names, positions and appointment terms for members of the TEQ Board are outlined in the following table. Name Position Appointment Date End Date Bob East Chairman 3 August September (resigned) Julieanne Alroe Deputy Chairman 12 December August 2015 Paul Donovan Member 12 December August 2015 Anna Guillan Member 20 December August August August August August August August 2018 Karen Hanna-Miller Member 3 August August 2018 Michael Healy Member 3 August March (resigned) Prof Judith McLean Member 20 December August 2015 Gary Smith Member 20 December August August August August August 2018 James Dixon Member 8 June 2 August 2018 Director-General, Tourism, Major Events, Small Business and the Commonwealth Games Member Permanent member under Tourism and Events Queensland Act 2012 ANNUAL REPORT 16/17 31

32 Government bodies Tourism and Events Queensland Board Act or instrument Tourism and Events Queensland Act 2012 Functions The primary role of the board is to provide strategic direction, effective governance and risk guidance over Tourism and Events Queensland s affairs, ensuring it discharges its legislated responsibilities and performs its functions in a way that is appropriate, effective and efficient. The board forms committees as appropriate to delegate its powers, duties and responsibilities. Achievements Financial reporting During -17, the TEQ Board set the strategic direction for the corporation through the Strategic Plan and led the execution of TEQ s new marketing strategy and the development of the Best of Queensland Experiences program. In addition, the Board considered a number of key industry partnership agreements, reviewed the Events Strategy 2025 and approved investment in a range of major events throughout the State driving economic and social benefits for Queensland. The transactions of the entity are accounted for in the financial statements. The entity is audited by the Queensland Audit Office. Remuneration Position Name Meeting attendance Approved annual, sessional or daily fee Approved subcommittee fees if applicable Chair Bob East 6 $35,000 pa N/A $35,000 Deputy Chair Julieanne Alroe 5 $10,000 pa N/A $10,000 Member Paul Donovan 6 $10,000 pa N/A $10,000 Member Anna Guillan 3 $10,000 pa N/A $10,000 Member Karen Hanna-Miller 5 $10,000 pa N/A $10,000 Member Michael Healy 4 $10,000 pa N/A $7,385 Member Prof Judith McLean 6 $10,000 pa N/A $10,000 Member Gary Smith 4 $10,000 pa N/A $10,000 Member James Dixon 0 $10,000 pa N/A $Nil Member No. scheduled meetings/ sessions Total out of pocket expenses Director-General, Tourism, Major Events, Small Business and the Commonwealth Games 6 Nil 4 N/A N/A N/A Actual fees received 32 ANNUAL REPORT 16/17

33 Gold Coast Events Management Ltd Act or instrument Corporations Act 2001 Functions Gold Coast Events Management Ltd trades as Events Management Queensland and operates the Gold Coast Airport Marathon, an annual running event, and the Pan Pacific Masters Games, a biennial multi-sports masters event, both held on the Gold Coast. Achievements Financial reporting The principal achievement for the reporting period was the successful staging of the 38th annual IAAF Gold Label event Gold Coast Airport Marathon, together with planning for the and 2018 events. The entity also prepared for and staged the world s biggest biennial masters games, the Pan Pacific Masters Games in November. The transactions of the entity are accounted for in the financial statements. The entity is not exempted from audit by the Auditor-General. Remuneration Position Name Meetings/sessions attendance Approved annual, sessional or daily fee Approved sub-committee fees if applicable Chair Kerry Watson 6 $71,175 N/A $71,175 Director Daphne Pirie 6 N/A N/A N/A Director Mark Reaburn 4 N/A N/A N/A Director Nick Elliott 6 N/A N/A N/A Director Lindsay Wallace 5 N/A N/A N/A No. scheduled meetings/sessions Total out of pocket expenses 6 $758 Actual fees received ANNUAL REPORT 16/17 33

34 Statutory obligations A summary of TEQ s recent progress towards ensuring compliance with statutory obligations is as follows: 1. Public Sector Ethics Act 1994 TEQ s Code of Conduct (the code) is aligned with the four ethics principles and values outlined in the Public Sector Ethics Act The code is intended to give staff a framework to ensure the organisation maintains its professional standards. The code outlines the expectations of all staff and provides information on the ethical values and behaviour required in TEQ s daily business activities. Adherence to these values is fundamental in building a relationship of trust between industry, Government and the community. The code applies to all staff as well as the Chairman, Board members and contractors. Information on the code is provided to all new employees during their induction and online training. Electronic copies are available for ongoing reference. If the code is not followed, performance feedback will ensue, with the outcome of this feedback ranging from counselling to termination of employment. TEQ s human resource management procedures and practices, including staff performance reviews, have been put in place in accord with the code. 2. Work Health & Safety Act 2011 TEQ s Work Health and Safety (WHS) Committee continued to meet quarterly to discuss WHS matters and facilitate compliance with the Work Health & Safety Act During -17, TEQ s WHS Management System was reviewed by a qualified external party against the AS/NZS 4801 Occupational Health and Safety Management Systems Standard. The review confirmed that the majority of recommendations previously proposed have been implemented. Information systems and recordkeeping The Public Records Act 2002 requires public authorities to make and keep full and accurate records of their activities and have regard to recordkeeping policies, standards and guidelines issued by the State Archivist. TEQ uses the HP-RM8 (Records Management 8.1) electronic document and records management system. Other systems record other information including FinanceOne for financial records and transactions, and past contract management, and SharePoint Online, OneDrive for Business and shared-drives for internal collaboration on documents. TEQ has engaged an external partner to manage TEQ s backup, archival and retrieval of digital records held in RM8, shared drives and other systems. All TEQ systems are maintained and updated with current or previous software releases and hosted in cloud-based infrastructure for resiliency and security. All staff receive training in the making and keeping of public records upon commencement. TEQ has an agreement with an external provider to store, retrieve and destroy its physical documents and records, as required. TEQ has an assigned role for records management operations. During -17, TEQ continued the practice of digitising all new physical records into RM8 and FinanceOne. There were no breaches of TEQ s information security during the year. TEQ completed full cyber security penetration testing of physical security of external facing systems; wireless LAN penetration; and social engineering (targeting of staff). TEQ performed well against benchmarks for all three areas, implemented all recommendations from the testing; and conducted cyber security training for staff. 34 ANNUAL REPORT 16/17

35 Efficient business operations TEQ continued to review its business operations during -17 to identify cost savings and operational efficiencies. During the year, TEQ: Implemented the Tourism Network Funding Program -19 to replace the former annual Core and Contestable grant funding programs, creating administration efficiencies for both TEQ and RTOs and funding certainty over the three-year term of the agreements; Entered into further efficiency arrangements with TA and Trade and Investment Queensland (TIQ) to streamline transactional processing between the organisations, improving efficiency of administration; Significantly reduced the number of accounts receivable invoices created, and related accounts receivable management, through use of external providers; Refined and customised contract documentation and processes for TEQ s International teams, simplifying commercial arrangements with partners and suppliers in international markets; Implemented Customer Relationship Management (CRM) solutions to enhance the management of internal and external public relations engagement, events stakeholder engagement and the management and reporting of familiarisations visits; Implemented electronic workflow solutions for five core business processes including cloudbased storage management, accounts payable and invoice processing; Adopted Uber Business service for ground transportation, improving speed, staff safety, accountability and visibility, and realising substantial costs savings; Upgraded staff computer hardware and software including latest Windows 10 and Office 365, providing improved performance, reliability and cyber security protection; Optimised the configuration and performance of TEQ s consumer and corporate websites; and Optimised TEQ s head office internet and voice services to significantly increase capacity. TEQ s procurement plan and associated procedures continue to incorporate a value-for-money framework and guide the efficient and effective conduct of TEQ s operations, consistent with the Queensland Procurement Policy. Open Data The following reporting requirements are now published online through the Queensland Government open data portal ( instead of being included in the annual report: Consultancies Overseas travel. In -17, TEQ had no information to report for the Queensland Language Services Policy. The reporting requirement for Government bodies (Tourism and Events Queensland Board and Gold Coast Events Management Ltd) is published within this annual report, please refer to page 82. ANNUAL REPORT 16/17 35

36 Workforce planning, attraction and retention TEQ is committed to attracting and retaining a highly skilled workforce to achieve its set objectives. Overall staff engagement for -17 was 83 per cent, measured by TEQ s annual staff engagement survey. At 30 June, there were 142 full-time equivalent employees (FTE) employed by the TEQ parent entity and the Tourism and Events Queensland Employing Office, comprising of: 19 FTE employed by Tourism and Events Queensland parent entity; and 123 FTE employed by Tourism and Events Queensland Employing Office. In addition, there were 15 FTE employed by Gold Coast Events Management Ltd, a controlled entity. Excluding Gold Coast Events Management Ltd, TEQ s permanent separation rate was nine per cent. The quality of TEQ s workforce is imperative to the achievement of its objectives. The following activities and programs undertaken in -17 were designed to enhance organisational effectiveness: 1. Capability framework TEQ has a capability framework to clarify the behaviours desired of all employees and leaders to build on our success and to shape our desired culture. The behaviours align how we approach our roles with our vision, values and strategic plan. The capability framework identifies four core themes that drive our key capabilities. Within each theme there are three capabilities that are delivered according to the requirements of the role. TEQ s core values are also listed in the framework and are aligned to the capabilities. By developing a clear and consistent language for defining the behavioural requirements of roles across TEQ, we can improve the focus and alignment of many key people practices, in particular: Selection for behaviour fit; Training and development; and Performance development discussions based on actual and required behaviours. 2. Performance framework The performance framework ensures individual goals and behaviours are linked to business plans, priority projects and/or the purpose of the role, together with key behaviours from the capability framework. The performance framework provides clear and practical guidance to assist employees to manage their performance by: Acknowledging and assisting the development of employees skills and knowledge; Valuing the efforts and achievements of employees by recognising and rewarding performance; Providing employees with an opportunity to manage and plan their career development; and Helping to retain valued employees. 36 ANNUAL REPORT 16/17

37 3. Key Position Risk Management TEQ has created a framework outlining the succession plan for key person risk roles including the CEO, Group Executive and other key leadership and specialist positions within the organisation. The framework addresses the possibility that a vacancy in a senior role will be filled within an acceptable timeframe to ensure minimal negative impacts on TEQ and its work. 4. Healthy, Wealthy & Wise initiatives TEQ s Healthy Wealthy and Wise program offers optional benefits and a range of information to assist staff to actively seek a lifestyle that promotes wellness. Activities offered in -17 included staff skin cancer checks, influenza vaccinations, QSuper seminars and appointments for individual advice, and yoga classes. TEQ is also part of the Australian Red Cross Blood Services Group program Red Flexible working arrangements TEQ believes it is important to support employees in maintaining a balance between work and personal lives. This contributes positively to productivity, job satisfaction and assists in retaining employees through a more effective work environment. A number of initiatives are offered to employees that provide a degree of flexibility to enable them to adapt their work arrangements to suit family responsibilities including: Part-time arrangements; Job sharing; Working Virtually Policy; Purchasing additional leave; and Provision of parenting facilities. 6. Learning and development A learning framework linked to our capability framework offers a range of specialised learning programs designed for staff. TEQ introduced the Future Leaders Program designed to build people s foundational knowledge and capability to lead and manage teams and projects. It is designed for employees who are currently in non-managerial positions that have a desire to progress into leadership roles. The program is aligned to TEQ s Trusted Leaders Program for managers to enable consistency in tools, processes and techniques. It includes an Emotional Intelligence selfassessment to guide each participant s professional development. In addition, TEQ conducted a Staff Strategy Day in November. The purpose of the day was to focus on the organisation s strategic direction for the year ahead and included keynote addresses from key industry representatives. 7. Employee consultative committee TEQ is committed to participative decisionmaking, which enables better communication flow across the organisation. At an organisational level, all People and Leadership initiatives are developed with the core philosophy that employees are an integral part of the success of any initiative. As such, employee working parties are drawn from relevant TEQ areas to be involved in the design and implementation of initiatives. 8. Certified Agreement The Industrial Relations Commission approved the Tourism and Events Queensland Certified Agreement on 27 March for a threeyear period. A number of training sessions for staff and managers were held to provide an overview of the terms and conditions. ANNUAL REPORT 16/17 37

38 Financial summary The Reporting Entity TEQ, constituted under the Tourism and Events Queensland Act 2012, is a statutory body within the meaning given in the Financial Accountability Act 2009 and is controlled by the State of Queensland which is the ultimate parent. The consolidated financial statements include the value of all revenues, expenses, assets, liabilities and equity of TEQ and its controlled entities, the Tourism and Events Queensland Employing Office and Gold Coast Events Management Ltd. Separate financial statements for TEQ controlled entities, Tourism and Events Queensland Employing Office and Gold Coast Events Management Ltd, can be obtained by contacting TEQ. Financial performance Successful delivery of TEQ services requires management of costs within budget and value-formoney expenditure in accordance with the Queensland Procurement Policy. For the -17 financial year TEQ had consolidated income of $ million, of which $ million was grant funding by the State Government. Total consolidated expenses for -17 were $ million, of which $95.56 million was invested in marketing, development, event funding and support, and grants to RTOs. Consolidated grant payment expenses for -17 totalled $43.17 million compared with $39.33 million for the prior year. This increase reflects the grant payments relating to additional major sporting events. Consolidated employee expenses were $19.77 million. The majority of employees work directly on marketing, development, research and events promotion and staging activities, both in Australia and overseas. The TEQ parent entity reported a break even operating result for the -17 financial year. The consolidated entity reported a surplus operating result of $0.19 million in -17 due to a surplus achieved by a controlled entity. Where applicable, further detail has been disclosed in the notes accompanying the accounts. Tourism and Events Queensland (Consolidated) $M $M $M -17 $M Grants and other contributions Cooperative income Other revenue Total income Marketing, development and events promotion and staging initiatives* Employee and operations expenses (in Queensland and overseas)** Total expenses Marketing, development and events promotion and staging initiatives as a % of total income 79.9% 78.7% 77.4% 78.2% * Includes grants paid to regional tourism organisations and event funding instalments and excludes marketing, development and events promotion and staging employee expenses. ** The majority of employees work directly on marketing, development, research and events promotion and staging activities both in Australia and overseas. At 30 June, total assets of the consolidated reporting entity were $12.65 million and total liabilities were $10.87 million. Equity of $1.78 million includes contributed equity relating to the transfer of the net assets of Events Queensland and its controlled entities that took place during ANNUAL REPORT 16/17

39 Consolidated Financial Report For the year ended 30 June Introduction These financial statements cover Tourism and Events Queensland ( the Corporation or TEQ ) and its controlled entities. Information has been provided for the consolidated and parent entity. The Corporation, constituted under the Tourism and Events Queensland Act 2012, is a statutory body within the meaning given in the Financial Accountability Act 2009 and is controlled by the State of Queensland which is the ultimate parent. The head office and principal place of business of the Corporation is: Level Makerston Street BRISBANE QLD 4000 A description of the Corporation s objectives and its principal activities is included in the notes to the financial statements. Separate Statements have been prepared for the Corporation s controlled entities, the Tourism and Events Queensland Employing Office and Gold Coast Events Management Ltd. The Statements may be obtained on the Corporation s website or by contacting the Corporation. ANNUAL REPORT 16/17 39

40 Table of Contents Financial Statements Statements of Comprehensive Income Page 41 Notes to the Financial Statements Statements of Financial Position Page 42 Statements of Changes in Equity Page 43 Statements of Cash Flows Page 44 Objectives and Principal Activities of the Corporation Page 45 Note 1 Summary of Significant Accounting Policies Page 45 Note 2 Revenue Page 52 Note 3 Marketing, Development and Events Support Expenses Page 52 Note 4 Grant Payments Page 53 Note 5 Employee Expenses Page 53 Note 6 Key Management Personnel and Remuneration Expenses Page 54 Note 7 Other Expenses Page 57 Note 8 Operating Result from Continuing Operations Page 57 Note 9 Receivables Page 58 Note 10 Other Financial Assets Page 58 Note 11 Property, Plant and Equipment Page 59 Note 12 Payables Page 60 Note 13 Accrued Employee Benefits Page 61 Note 14 Other Liabilities Page 62 Note 15 Reconciliation of Operating Result to Net Cash from Operating Activities Page 62 Note 16 Commitments for Expenditure Page 63 Note 17 Financial Instruments Page 64 Note 18 Related Party Disclosures Page 68 Note 19 Board Remuneration Page 70 Note 20 Investments in Controlled Entities Page 72 Note 21 Contingencies Page 73 Note 22 Events Occurring after Balance Date Page 73 Note 23 Budget vs Actual Comparison Page 73 Certification Management Certificate Page 77 Independent Auditor s Report Page ANNUAL REPORT 16/17

41 Tourism and Events Queensland Statements of Comprehensive Income for the year ended 30 June Income from Continuing Operations Consolidated Parent Notes Grants and contributions 2 107, , , ,895 Cooperative income 2 7,762 8,314 7,898 8,409 Other revenue 2 6,768 5,347 1,078 1,219 Total Income from Continuing Operations 122, , , ,523 Expenses from Continuing Operations Marketing, development and events support expenses 3 52,391 50,155 48,489 47,111 Grant payments 4 43,165 39,334 43,765 39,934 Employee expenses 5,6 19,766 18,642 18,153 17,247 Depreciation Impairment losses Other expenses 7 6,270 7,199 5,826 6,822 Total Expenses from Continuing Operations 122, , , ,187 Operating Result from Continuing Operations (186) - (664) Other Comprehensive Income Total Comprehensive Income 193 (186) - (664) The accompanying notes form part of these Financial Statements. ANNUAL REPORT 16/17 41

42 Tourism and Events Queensland Statements of Financial Position as at 30 June Consolidated Parent Notes Current Assets Cash and cash equivalents 9,838 7,581 6,407 4,026 Receivables 9 1,718 3,330 1,545 3,089 Other financial assets Prepayments Total Current Assets 12,071 11,233 8,298 7,245 Non-Current Assets Property, plant and equipment , ,005 Total Non-Current Assets 579 1, ,005 Total Assets 12,650 12,241 8,876 8,250 Current Liabilities Payables 12 6,582 6,527 6,645 5,952 Accrued employee benefits 13 3,452 3, Other current liabilities Total Current Liabilities 10,192 9,863 7,271 6,487 Non-Current Liabilities Accrued employee benefits Other provisions Other non-current liabilities Total Non-Current Liabilities Total Liabilities 10,867 10,651 7,331 6,705 Net Assets 1,783 1,590 1,545 1,545 Equity Contributed equity 12,908 12,908 12,908 12,908 Accumulated deficit (11,125) (11,318) (11,363) (11,363) Total Equity 1,783 1,590 1,545 1,545 The accompanying notes form part of these Financial Statements. 42 ANNUAL REPORT 16/17

43 Tourism and Events Queensland Statements of Changes in Equity for the year ended 30 June Consolidated Accumulated Deficit Contributed Equity TOTAL Balance at 1 July 2015 (11,132) 12,908 1,776 Operating result from continuing operations (186) - (186) Other comprehensive income Balance at 30 June (11,318) 12,908 1,590 Balance at 1 July (11,318) 12,908 1,590 Operating result from continuing operations Other comprehensive income Balance at 30 June (11,125) 12,908 1,783 Parent Accumulated Deficit Contributed Equity TOTAL Balance at 1 July 2015 (10,699) 12,908 2,209 Operating result from continuing operations (664) - (664) Other comprehensive income Balance at 30 June (11,363) 12,908 1,545 Balance at 1 July (11,363) 12,908 1,545 Operating result from continuing operations Other comprehensive income Balance at 30 June (11,363) 12,908 1,545 The accompanying notes form part of these Financial Statements. ANNUAL REPORT 16/17 43

44 Tourism and Events Queensland Statements of Cash Flows for the year ended 30 June Consolidated Parent Notes Cash flows from operating activities Inflows: Grants and contributions from Government 108, , ,459 Receipts from customers 16,852 15,825 10,981 10,887 GST input tax credits received from the ATO 8,397 8,126 8,073 7,903 Interest received Outflows: Payments to suppliers and employees (129,837) (124,902) (123,982) (120,486) GST remitted to ATO (1,674) (1,408) (1,156) (1,018) Net cash provided by / (used in) operating activities 15 2, ,339 (58) Cash flows from investing activities Inflows: Proceeds from forward contracts Outflows: 7,308 6,427 7,308 6,427 Payments for forward contracts (7,266) (6,311) (7,266) (6,311) Payments for property, plant & equipment - (61) - (61) Net cash provided by investing activities Net increase / (decrease) in cash and cash equivalents 2, ,381 (3) Cash and cash equivalents at beginning of the year 7,581 7,184 4,026 4,029 Cash and cash equivalents at end of financial year 9,838 7,581 6,407 4,026 The accompanying notes form part of these Financial Statements. 44 ANNUAL REPORT 16/17

45 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June Objectives and Principal Activities of the Corporation Tourism and Events Queensland s objective is to work collaboratively with public sector units and Queensland tourism industry participants to promote and market Queensland and to identify, attract, develop and promote major events for the State, to attract international and domestic travellers to travel to and within Queensland, to contribute to the Queensland economy, enhance the profile of Queensland and foster community pride in Queensland. Note 1 Summary of Significant Accounting Policies (a) (b) Statement of Compliance The Corporation has prepared these financial statements in compliance with section 43 of the Financial and Performance Management Standard The financial statements comply with Queensland Treasury s Minimum Reporting Requirements for reporting periods beginning on or after 1 July. The Corporation is a not-for-profit entity and these general purpose financial statements are prepared on an accrual basis (except for the Statement of Cash Flows which is prepared on a cash basis) in accordance with Australian Accounting Standards and Interpretations applicable to not-for-profit entities. Presentation Currency and Rounding Amounts included in the financial statements are in Australian dollars and have been rounded to the nearest $1,000 or, where that amount is $500 or less, to zero, unless disclosure of the full amount is specifically required. Comparatives Comparative information reflects the audited financial statements except where restated to conform with changes in presentation for the current financial year. Current/Non-Current Classification Assets and liabilities are classified as either 'current' or 'non-current' in the Statements of Financial Position and associated notes. Assets are classified as 'current' where their carrying amount is expected to be realised within 12 months after the reporting date. Liabilities are classified as 'current' when they are due to be settled (c) (d) within 12 months after the reporting date, or the Corporation does not have an unconditional right to defer settlement to beyond 12 months after the reporting date. All other assets and liabilities are classified as non-current. Authorisation of Financial Statements for Issue The financial statements are authorised for issue by the Chairman, a Board Member, the Chief Executive Officer and the Group Executive Corporate Services and Chief Financial Officer at the date of signing the Management Certificate. Basis of Measurement Historical cost is used as the measurement basis in this financial report except for provisions expected to be settled 12 or more months after reporting date which are measured at their present value and other financial assets which are measured at fair value. Historical Cost Under historical cost, assets are recorded at the amount of cash or cash equivalents paid or the fair value of consideration given to acquire assets at the time of their acquisition. Liabilities are recorded at the amount of proceeds received in exchange for the obligation or at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business. Fair Value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly derived from observable inputs or estimated using (e) another valuation technique. Fair value is determined using one of the following three approaches: The market approach uses prices and other relevant information generated by market transactions involving identical or comparable (i.e. similar) assets, liabilities or a group of assets and liabilities, such as a business. The cost approach reflects the amount that would be required currently to replace the service capacity of an asset. This method includes the current/depreciated replacement cost methodology. The income approach converts multiple future cash flows amounts to a single current (i.e. discounted) amount. When the income approach is used, the fair value measurement reflects current market expectations about those future amounts. The Corporation s forward exchange contracts are valued using the market approach. Present Value Present value represents the present discounted value of the future net cash inflows that the item is expected to generate (in respect of assets) or the present discounted value of the future net cash outflows expected to settle (in respect of liabilities) in the normal course of business. Foreign Currency Transactions All transactions that are undertaken in a foreign currency are translated into Australian dollars. Foreign currency transactions are recorded on initial recognition in Australian dollars by applying to the foreign currency amount the spot exchange rate between the ANNUAL REPORT 16/17 45

46 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 1 Summary of Significant Accounting Policies (continued) Australian dollar and the foreign currency at the date of the transaction. be measured reliably with a sufficient degree of certainty. This occurs when the marketing or event activity is provided at which time the invoice is raised. Monetary assets and liabilities held in foreign currencies at balance date are retranslated into Australian dollars in the Statements of Financial Position at the closing rate. (h) Registration Income Registration fees revenue is recognised when the event takes place. Registration fees received in advance of an event are accounted for as unearned income in the Statements of Financial Position. Distinction between Grant Payments and Procurement (f) Translation differences are taken to the Statements of Comprehensive Income in the financial year in which they arise. The Reporting Entity For a transaction to be classified as a marketing, development or event support expense in Note 3 or other expenses in Note 7, the value of goods or services received by the Corporation must be of approximately equal value to the value of the consideration exchanged for those goods or services. Where this is not the substance of the arrangement, the transaction is classified as a grant payment in Note 4. (g) The consolidated financial statements include all income, expenses, assets, liabilities and equity of the economic entity comprising the Corporation and the entities it controls where these entities are material (refer to Note 20). All transactions and balances internal to the economic entity have been eliminated in full. The parent entity financial statements (titled Parent ) include all income, expenses, assets, liabilities and equity of the Corporation only. Revenue Recognition (i) (j) Cash and Cash Equivalents For the purposes of the Statements of Financial Position and the Statements of Cash Flows, cash assets include all cash and cheques receipted but not banked at 30 June as well as deposits at call with financial institutions. Property, Plant and Equipment Recognition Thresholds Items of property, plant and equipment, including leasehold improvements, with a historical cost or other value equal to or in excess of $5,000 in the year of acquisition are reported as Property, Plant and Equipment. Items with a lesser value are expensed in the year of acquisition. Measurement Plant and equipment is measured at historical cost in accordance with the Non-Current Asset Policies for the Queensland Public Sector (NCAP). Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Corporation and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Grants and Contributions Grants and contributions are nonreciprocal in nature so do not require any goods or services to be provided in return. Corresponding revenue is recognised in the year in which the Corporation obtains control over the grant/contribution/donation (control is generally obtained at the time of receipt). Property, plant and equipment is measured at historical cost. Historical cost is determined as the value given as consideration plus costs incidental to the acquisition, including all other costs incurred in getting assets ready for use. The carrying amounts for such plant and equipment is not materially different from their fair value. Depreciation Expense Property, plant and equipment is depreciated on a straight line basis so as to allocate the net cost, less its estimated residual value, progressively over its estimated useful life to the Corporation. Key Judgement: Straight line depreciation is used reflecting the progressive, and even, consumption of future economic benefits over their useful life to the Corporation and consolidated entity. For the Corporation s depreciable assets, the estimated amount to be received on disposal at the end of their useful life (residual value) is determined to be zero. Cooperative Income Cooperative income comprises revenue earned from industry partners as a contribution towards the cost of marketing and event activity. Cooperative income is recognised as revenue when the revenue has been earned and can Key Estimates: For each class of depreciable asset the following useful lives are used: Leasehold Improvements Lease term Lease term Property, Plant and Equipment: Computer equipment 3-10 years 3-10 years Furniture, fixtures and fittings 6-12 years 6-12 years 46 ANNUAL REPORT 16/17

47 (k) Impairment All non-current physical and intangible assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists, the Corporation determines the asset s recoverable amount. Any amount by which the asset s carrying amount exceeds the recoverable amount is recorded as an impairment loss. Recoverable amount is determined as the higher of the asset s fair value less costs to sell and the depreciated replacement cost. An impairment loss is recognised immediately in the Statements of Comprehensive Income, unless the asset is carried at a re-valued amount. When the asset is measured at the re-valued amount, the impairment loss is offset against the asset revaluation surplus of the relevant class to the extent available. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income, unless the asset is carried at a re-valued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly derived from observable inputs or estimated using another valuation technique. Observable inputs are publicly available data that are relevant to the characteristics of the assets/liabilities being valued. Unobservable inputs are data, assumptions and judgements that are not available publicly, but are relevant to the characteristics of the assets/liabilities being valued. Significant unobservable inputs used by the Corporation include, but are not limited to, subjective adjustments made to observable data to take account of the characteristics of the Corporation assets/liabilities and assessments of physical condition and remaining useful life. Unobservable inputs are used to the extent that sufficient relevant and reliable observable inputs are not available for similar assets/liabilities. A fair value measurement of a nonfinancial asset takes into account a market participant s ability to generate economic benefits by using the asset in its highest and best use. All assets and liabilities of the Corporation for which fair value is measured or disclosed in the financial statements are categorised within the following fair value hierarchy, based on the data and assumptions used in the most recent specific appraisals: Level 1 represents fair value measurements that reflect unadjusted quoted market prices in active markets for identical assets and liabilities; Level 2 represents fair value measurements that are substantially derived from inputs (other than quoted prices included within level 1) that are observable, either directly or indirectly; and Level 3 represents fair value measurements that are substantially derived from unobservable inputs. None of the Corporation s valuations of assets or liabilities are eligible for categorisation into level 1 of the fair value hierarchy. There were no transfers of assets between fair value hierarchy levels during the period. (l) (m) (n) More specific fair value information about the Corporation s Financial Instruments is outlined in Note 1(n). Investments in controlled entities All investments are initially recognised at cost, being the fair value of the consideration given. After initial recognition, investments, which are classified as investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, are measured at cost less amounts provided to recognise diminution in values. Payables Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the nominal amount i.e. agreed purchase/contract price, gross of all applicable trade and other discounts. Amounts owing are unsecured. Financial Instruments Recognition Financial assets and financial liabilities are recognised in the Statements of Financial Position when the Corporation becomes party to the contractual provisions of the financial instrument. Classification Financial instruments are classified and measured as follows: Cash and cash equivalents held at fair value through profit or loss Receivables held at amortised cost Other Financial Assets Forward exchange contracts receivable held at fair value through profit or loss Payables held at amortised cost Other Financial Liabilities Forward exchange contracts payable held at fair value through profit or loss ANNUAL REPORT 16/17 47

48 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 1 Summary of Significant Accounting Policies (continued) (o) Derivative Financial Instruments The Corporation uses derivative financial instruments such as foreign currency contracts to hedge its risk associated with foreign currency fluctuations for general commitments in several of its international offices. Derivative financial instruments are not held for speculative purposes. Derivatives are initially recognised at fair value on the date the derivative contract is entered into and are subsequently re-valued at the reporting date in line with market fluctuations. The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. The Corporation s derivative financial instruments do not qualify for hedge accounting. Any gains or losses arising from changes in fair value are taken directly to net profit or loss for the year. All other disclosures relating to the measurement and financial risk management of financial instruments held by the Corporation are included in Note 17. Employee Benefits Employer superannuation contributions and annual and long service leave entitlements are regarded as employee benefits. Payroll tax and workers compensation insurance are a consequence of employing employees and are not counted in an employee s total remuneration package. They are not employee benefits and are recognised separately as employee related expenses. Wages, Salaries and Sick Leave Wages and salaries due but unpaid at reporting date are recognised in the Statements of Financial Position at the current salary rates. As the Corporation expects such liabilities to be wholly settled within 12 months of reporting date, the liabilities are recognised at undiscounted amounts. Prior history indicates that on average, sick leave taken each reporting period is less than the entitlement accrued. This is expected to continue in future periods. Accordingly, it is unlikely that existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is recognised. As sick leave is non-vesting, an expense is recognised for this leave as it is taken. Annual Leave and Long Service Leave Liabilities arising in respect of annual leave and long service leave that are expected to be settled within 12 months are measured at their nominal values. Liabilities for annual leave and long service leave benefits that are not expected to be settled within 12 months are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to government guaranteed securities, which have terms to maturity approximating the terms of the related liability, are used. Superannuation The Corporation and its controlled entities contribute to QSuper, the superannuation scheme for Queensland Government employees, and other superannuation funds. Contributions meet or exceed the requirements of the Superannuation Guarantee Levy and are expensed in the period in which they are paid or payable. Those employer superannuation contributions that are paid to QSuper are paid at rates determined by the Treasurer on the advice of the State Actuary. The (p) Corporation s obligation is limited to its contribution to QSuper. The QSuper scheme has defined benefit and defined contribution categories. The liability for defined benefits is held on a whole-of-government basis and reported in those financial statements pursuant to AASB 1049 Whole of Government and General Government Sector Financial Reporting. Key Executive Management Personnel and Remuneration Key executive management personnel and remuneration disclosures are made in accordance with section 5 of the Financial Reporting Requirements for Queensland Government Agencies issued by Queensland Treasury. Refer to Note 6 for the disclosures on key executive management personnel and remuneration. Leases A distinction is made in the financial statements between finance leases that effectively transfer from the lessor to the lessee substantially all risks and benefits incidental to ownership, and operating leases, under which the lessor retains substantially all risks and benefits. Where a non-current physical asset is acquired by means of a finance lease, the asset is recognised at the lower of the fair value of the leased property and the present value of the minimum lease payments. The lease liability is recognised at the same amount. Lease payments are allocated between the principal component of the lease liability and the interest expense. Operating lease payments are representative of the pattern of benefits derived from the leased assets and are expensed in the periods in which they are incurred on a straight line basis. Incentives 48 ANNUAL REPORT 16/17

49 received on entering into operating leases are recognised as liabilities. Lease payments are allocated between rental expense and reduction of the liability. Operating leases are entered into as a means of acquiring access to office accommodation and storage facilities. Lease terms extend over a period of 1 to 5 years. The Corporation has no option to purchase the leased item at the conclusion of the lease although the lease provides for a right of renewal at which time the lease terms are renegotiated. (s) (t) GST credits receivable from and GST payable to the ATO, are recognised (refer to Note 9). Contributed Equity Non-reciprocal transfers of assets and liabilities between wholly-owned Queensland State Public Sector entities are adjusted to Contributed Equity in accordance with Interpretation 1038 Contributions by Owners Made to Wholly- Owned Public Sector Entities. Accounting Estimates and Judgement (q) Operating lease rental expenses comprises the minimum lease payments payable under operating lease contracts. Lease payments are generally fixed, but with inflation escalation clauses on which contingent rentals are determined. Provisions Provisions are recorded when the Corporation has a present obligation, either legal or constructive as a result of a past event. They are recognised at the amount expected at reporting date to settle the obligation in a future period. Where the settlement of the obligation is expected after 12 or more months, the obligation is discounted to the present value using an appropriate discount rate. The preparation of financial statements necessarily requires the determination and use of certain critical accounting estimates, assumptions, and management judgements that have that potential to cause a material adjustment to the carrying amount of assets and liabilities within the next financial year. Such estimates, judgements and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods as relevant. Estimates and assumptions that have a potential significant effect are outlined in the following financial statement note: Accrued Employee Benefits Note 13 (r) Taxation The Corporation is a State body as defined under the Income Tax Assessment Act 1936 and is exempt from Commonwealth taxation with the exception of Fringe Benefits Tax (FBT) and Goods and Services Tax (GST). The Corporation s controlled entities are exempt from income tax under Division 50 of the Income Tax Assessment Act 1997 and are exempt from Commonwealth taxation with the exception of FBT and GST. (u) First Year Application of New Accounting Standards or Change in Accounting Policy The Corporation did not voluntarily change any of its accounting policies during -17. No Australian Accounting Standards have been early adopted for -17. The only Australian Accounting Standard that became effective for the first time in -17 is AASB124 Related Party Disclosures. The standard requires note ANNUAL REPORT 16/17 49

50 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 1 Summary of Significant Accounting Policies (continued) (v) disclosures about relationships between a parent entity and its controlled entities, key management personnel (KMP) remuneration expenses and other related party transactions, and does not impact on financial statement line items. As Queensland Treasury already required disclosure of KMP remuneration expenses, AASB 124 had minimal impact on the Corporation s KMP disclosures compared to (refer to Note 6). Material related party transactions for -17 are disclosed in Note 18. No comparative information about related party transactions is required in respect of The relationship between the Corporation and its controlled entities is already outlined in Note 18. No new Australian Accounting Standards effective for the first time in -17 had any material impact on this financial report. Future Impact of Accounting Standards Not Yet Effective At the date of authorisation of the financial report, the expected impacts of new or amended Australian Accounting Standards issued but with future commencement dates are set out below: AASB -2 Amendments to Australian Accounting Standards Disclosure Initiative: Amendments to AASB 107 As from the Corporation s financial statements for -18, this standard will require additional disclosures to enable the reader to evaluate changes in liabilities arising from financing activities. These disclosures will include both cash flows and non-cash changes between the opening and closing balance of the relevant liabilities and be disclosed by way of a reconciliation in the notes to the Statement of Cash Flows. The Corporation is yet to adopt this amendment however at this stage does not expect a significant impact on its present accounting practices. AASB 1058 Income of Not-for-Profit Entities and AASB 15 Revenue from Contracts with Customers This Standard will become effective from reporting periods beginning on or after 1 January 2019 and contains much more detailed requirements for the accounting for certain types of revenue from cooperative partners. Depending on the specific contractual terms, the new requirements may potentially result in a change to the timing of revenue from cooperative activities, such that some revenue may need to be deferred to a later reporting period to the extent that the Corporation has received cash but has not met its associated obligations (such amounts would be reported as a liability (unearned revenue). The Corporation is yet to complete its analysis of current cooperative arrangements, but at this stage does not expect a significant impact on its present accounting practices. Grants that are not enforceable and/or not sufficiently specific will not qualify for deferral and continue to be recognised as revenue as soon as they are controlled. The Corporation receives several grants for which there are no sufficiently specific performance obligations. These grants are expected to continue being recognised as revenue upfront assuming no changes to the current grant arrangements. AASB 9 Financial Instruments and AASB Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) These Standards will become effective from reporting periods beginning on or after 1 January The main impacts of these standards on the Corporation are that they will change the requirements for the classification, measurement, impairment and disclosures associated with the Corporation s financial assets. AASB 9 will introduce different criteria for whether financial assets can be measured at amortised cost or fair value. The Corporation has commenced reviewing the measurement of its financial assets against the new AASB 9 classification and measurement requirements. However, as the classification of financial assets at the date of initial application of AASB 9 will depend on the facts and circumstances existing at that date, the Corporation s conclusions will not be confirmed until closer to that time. At this stage, and assuming no change in the types of transactions the Corporation enters into, all of the Corporation s financial assets are expected to be required to be measured at fair value (instead of the measurement classifications presently used in Note 17). In the case of the Corporation s current receivables, as they are short-term in nature, the carrying amount is expected to be a reasonable approximation of fair value. Changes in the fair value of those assets will be reflected in the Corporation s operating result. Another impact of AASB 9 relates to calculating impairment losses for the Corporation s receivables. Assuming no substantial change in the nature of the Corporation s receivables, as they don t include a significant financing component, impairment losses will be determined according to the amount of lifetime expected credit losses. On initial adoption of AASB 9, the Corporation will need to determine the expected credit losses for its receivables by comparing the credit risk at that time to the credit risk that existed when those receivables were initially recognised. The Corporation will not need to restate comparative figures for financial instruments on adopting AASB 9 as from However, changed disclosure requirements will apply from that time. A number of one-off disclosures will be required in the financial statements to explain the impact of adopting AASB 9. Assuming 50 ANNUAL REPORT 16/17

51 no change in the types of financial instruments that the Corporation enters into, the most likely ongoing disclosure impacts are expected to relate to the credit risk of financial assets subject to impairment. AASB 16 Leases This Standard will become effective for reporting periods beginning on or after 1 January When applied, the standard supersedes AASB 117 Leases, AASB Interpretation 4 Determining whether an Arrangement contains a Lease, AASB Interpretation 115 Operating Leases Incentives and AASB Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. Impact for Lessees Unlike AASB 117 Leases, AASB 16 introduces a single lease accounting model for lessees. Lessees will be required to recognise a right-of-use asset (representing rights to use the underlying leased asset) and a liability (representing the obligation to make lease payments) for all leases with a term of more than 12 months, unless the underlying assets are of low value. In effect, the majority of operating leases (as defined by the current AASB 117) will be reported on the Statements of Financial Position under AASB 16. There will be a significant increase in assets and liabilities for agencies that lease assets. The impact on the reported assets and liabilities would be largely in proportion to the scale of the Corporation s leasing activities. of restoration costs and any initial direct costs incurred by the lessee. The right-of-use asset will give rise to a depreciation expense. The lease liability will be initially recognised at an amount equal to the present value of the lease payments during the lease term that are not yet paid. Current operating lease rental payments will no longer be expensed in the Statement of Comprehensive Income. They will be apportioned between a reduction in the recognised lease liability and the implicit finance charge (the effective rate of interest) in the lease. The finance cost will also be recognised as an expense. AASB 16 allows a cumulative approach rather than full retrospective application to recognising existing operating leases. If a lessee chooses to apply the cumulative approach, it does not need to restate comparative information. Instead, the cumulative effect of applying the standard is recognised as an adjustment to the opening balance of accumulated surplus (or other component of equity, as appropriate) at the date of initial application. The Corporation will await further guidance from Queensland Treasury on the transitional accounting method to be applied. The Corporation has not yet quantified the impact on the Statement of Comprehensive Income or the Statement of Financial Position of applying AASB 16 to its current operating leases, including the extent of additional disclosure required. The right-of-use asset will be initially recognised at cost, consisting of the initial amount of the associated lease liability, plus any lease payments made to the lessor at or before the commencement date, less any lease incentive received, the initial estimate ANNUAL REPORT 16/17 51

52 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 2 Revenue Grants and Contributions Department of Tourism, Major Events, Small Business and the Commonwealth Games Consolidated Parent 107, , , ,642 Department of the Premier and Cabinet Department of Education and Training , , , ,895 Cooperative Income Cooperative marketing income 7,026 7,384 7,162 7,479 Cooperative event income ,762 8,314 7,898 8,409 Other Revenue Registration income 3,702 2, Interest Rent received Other 2,687 2, ,768 5,347 1,078 1,219 Consolidated Parent Note 3 Marketing, Development and Events Support Expenses Domestic marketing activity 27,538 24,867 27,538 24,867 International marketing activity 16,515 16,777 16,515 16,777 Event staging and event marketing, assessment and support activity 6,990 6,972 3,088 3,928 Research activity 1,348 1,539 1,348 1,539 52,391 50,155 48,489 47,111 These figures do not include the salaries and wages of marketing, development, research or event staging and promotion staff or event funding grant payments. 52 ANNUAL REPORT 16/17

53 Note 4 Grant Payments Consolidated Event funding 36,165 32,267 36,765 32,867 Regional Tourism Organisation grant payments 7,000 7,067 7,000 7,067 Parent 43,165 39,334 43,765 39,934 Note 5 Employee Expenses Consolidated Parent Employee Benefits Wages and salaries 15,314 14,408 2,055 1,656 Annual leave expense 1,461 1, Long service leave expense Employer superannuation contributions 1,600 1, Employing office ,736 15,204 Employee Related Expenses Workers compensation Payroll tax Other employee related expenses ,766 18,642 18,153 17,247 No. No. No. No. Full-Time Equivalent Employees: ANNUAL REPORT 16/17 53

54 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 6 Key Management Personnel and Remuneration Expenses (a) Key Management Personnel As from -17, the Corporation s responsible Minister is identified as part of the key management personnel, consistent with additional guidance included in the revised version of AASB 124 Related Party Disclosures. The Minister is the Honourable Kate Jones MP, Minister for Education and Minister for Tourism, Major Events and the Commonwealth Games. The following details for non-ministerial, non-board member key management personnel include those positions that had authority and responsibility for planning, directing and controlling the activities of the Corporation during -17 and Further information on these positions can be found in the body of the Annual Report under the section relating to Executive Management. Position Chief Executive Officer* Group Executive Global Marketing** Group Executive Corporate Services** Group Executive Corporate Affairs** Group Executive Events** Group Executive Destinations & Global Partnerships** Responsibilities Overall efficient, effective and economical administration and operation of the Corporation in accordance with the Board s priorities. Leading the marketing group to develop and deliver global consumer-driven destination marketing, targeting a balanced portfolio of markets, in line with the destination tourism framework and the TEQ's Global Marketing Strategy Leading the Corporation s operational, strategic and financial activities. The Group Executive Corporate Services is also the Chief Financial Officer and is responsible for managing the financial risks of the Corporation in addition to financial planning, record keeping and financial reporting to the CEO and Board of Directors Leading the Corporation s corporate affairs and corporate communications to strategically enhance the Corporation s relationships with key stakeholders. Responsible for delivering a world-class calendar of events for Queensland, guided by the Events Strategy 2025, and optimising the value of Queensland s event calendar by leveraging the competitive advantage provided by Queensland s destinations. Responsible for holistic strategic global partnerships and international operations. The Group Executive Destinations and Global Partnerships also leads relationships between the Corporation and the Regional Tourism Organisations, DTESB and QTIC to deliver strategies and plans under the destination tourism planning framework. * Appointed Authority Governor in Council ** Appointed Authority Board of Directors 54 ANNUAL REPORT 16/17

55 (b) Remuneration Expenses Ministerial remuneration entitlements are outlined in the Legislative Assembly of Queensland s Members Remuneration handbook. The Corporation does not bear any cost of remuneration of Ministers. The majority of Ministerial entitlements are paid by the Legislative Assembly, with the remaining entitlements being provided the Ministerial Services Branch within the Department of the Premier and Cabinet. As all Ministers are reported as KMP of the Queensland Government, aggregate remuneration expenses for all Ministers is disclosed in the Queensland General Government and Whole of Government Consolidated Financial Statements as from -17, which are published as part of Queensland Treasury s Report on State Finances. Remuneration policy for the Corporation s executive is set by the Board s Audit and Remuneration Committee. The remuneration and other terms of employment for the key executive management personnel are specified in employment contracts. The following disclosures focus on the expenses incurred by the Corporation during the respective reporting periods that are attributable to key management positions. Therefore, the amounts disclosed reflect expenses recognised in the Statement of Comprehensive Income. Remuneration for executives comprise of the following components: Short term employee expenses which include: o o Base salary, allowances and leave entitlements paid and provided for the entire year or for that part of the year during which the employee was a key management person; and Non-monetary benefits provision of benefits together with fringe benefits tax applicable to the benefit. Long term employee expenses include amounts expensed in respect of long service leave entitlements earned. Post-employment expenses include amounts expensed in respect of employer superannuation obligations. Termination benefits are not provided for within individual contracts of employment. Contracts of employment provide only for notice periods or payment in lieu of notice on termination, regardless of the reason for termination. Performance bonuses are not paid under the contracts in place. Total fixed remuneration is calculated on a total cost basis and includes the base and nonmonetary benefits, long term employee benefits and post-employment benefits. ANNUAL REPORT 16/17 55

56 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 6 Key Management Personnel and Remuneration Expenses (continued) 1 July 30 June Position (date resigned if applicable) Short Term Employee Expenses Monetary Expenses Non-Monetary Benefits Long Term Employee Expenses Post- Employment Expenses Termination Benefits Total Expenses Chief Executive Officer Group Executive Global Marketing (to 20 March ) (33) Group Executive Corporate Services Group Executive Corporate Affairs Group Executive Events Group Executive Destinations and Global Partnerships July June Position (date resigned if applicable) Short Term Employee Expenses Monetary Expenses Non-Monetary Benefits Long Term Employee Expenses Post- Employment Expenses Termination Benefits Total Expenses Chief Executive Officer Group Executive Global Marketing Group Executive Corporate Services (from 19 October 2015) Group Executive Corporate Affairs Group Executive Events Group Executive Destinations and Global Partnerships ANNUAL REPORT 16/17

57 Consolidated Note 7 Other Expenses Lease expenses 2,167 2,085 2,003 1,914 Telephone, fax and postage Computer charges 1,147 1,408 1,107 1,386 Contractors and consultants fees 610 1, ,083 Travel and accommodation expenses Printing, stationery and office consumables Staff training Rates, electricity and other charges Bad and doubtful debts Insurance and legal fees External audit fees* Fringe Benefits Tax Repairs and maintenance Bank fees and charges Subscriptions Entertainment Loss on foreign exchange - realised Loss on disposal of fixed assets Other ,270 7,199 5,826 6,822 Parent Audit Fees *Total audit fees quoted by the Queensland Audit Office relating to the -17 financial year (both the Corporation and its controlled entities), are $117,000 exclusive of GST (: $114,450). Note 8 Operating Result from Continuing Operations The operating result from continuing operations for the parent entity is nil. The operating result of the controlled entities are disclosed in Note 20. ANNUAL REPORT 16/17 57

58 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Consolidated Note 9 Receivables Trade debtors Less: Allowance for impairment loss Grant receivable GST receivable 1,223 1,413 1,223 1,413 GST payable (572) (112) (572) (112) Accrued revenue Other receivables ,291 2,699 1,291 2,699 1,718 3,330 1,545 3,089 Parent Consolidated Parent Note 10 Other Financial Assets Current Forward exchange contracts receivable 6,206 1,018 6,206 1,018 Forward exchange contracts payable (6,206) (976) (6,206) (976) Non-Current Forward exchange contracts receivable 1,054-1,054 - Forward exchange contracts payable (1,054) - (1,054) The Corporation intends to realise the receivable and settle the liability relating to forward exchange contracts simultaneously therefore the receivable and payable are offset and the net amount presented in the Statements of Financial Position. 58 ANNUAL REPORT 16/17

59 Note 11 Property, Plant and Equipment Leasehold improvements Consolidated At cost 1,740 1,764 1,740 1,764 Less: Accumulated depreciation (1,212) (821) (1,212) (821) Plant and equipment Parent At cost Less: Accumulated depreciation (351) (747) (288) (627) Total Property, plant and equipment At cost 2,142 2,576 2,078 2,453 Less: Accumulated depreciation (1,563) (1,568) (1,500) (1,448) 579 1, ,005 Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year are set out below. Leasehold improvements Plant and equipment Total Carrying Amount at 1 July 943 1, ,008 1,359 Additions Disposals (17) (17) - Depreciation expense (398) (396) (14) (16) (412) (412) Carrying amount at 30 June ,008 ANNUAL REPORT 16/17 59

60 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 11 Property, Plant and Equipment (continued) Leasehold improvements Plant and equipment Total Carrying Amount at 1 July 943 1, ,005 1,353 Additions Disposals (17) (17) - Depreciation expense (398) (396) (12) (13) (410) (409) Carrying amount at 30 June ,005 Consolidated Note 12 Payables Trade creditors ,434 3,533 Accrued expenses 3,604 2,581 3,058 2,097 Unearned revenue 2,249 2, Other creditors ,582 6,527 6,645 5,952 Parent The Corporation has a MasterCard credit facility with Westpac to a limit of $1,196,500 (: $1,500,000). At 30 June, the Corporation had utilised approximately $17,245 of this facility (: $23,007). 60 ANNUAL REPORT 16/17

61 Consolidated Note 13 Accrued Employee Benefits Current Annual leave 1,634 1, Long service leave 1,503 1, Wages outstanding ,452 3, Non-Current Long service leave Parent 3,987 3, Movements in accrued employee benefits Consolidated Current Non-current Annual leave Long service leave Long service leave Opening balance at 1 July 1,522 1, Increase/(decrease) in provision 1, Reductions in provision as a result of payments (1,380) (298) - Closing balance at 30 June 1,634 1, Annual leave Current Parent Long service leave Non-current Long service leave Opening balance at 1 July Increase/(decrease) in provision Reductions in provision as a result of payments (157) - - Closing balance at 30 June ANNUAL REPORT 16/17 61

62 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Consolidated Note 14 Other Liabilities Current Lease incentive Rent payable liability Parent Non-Current Lease incentive Rent payable liability Note 15 Reconciliation of Operating Result to Net Cash from Operating Activities Consolidated Cash from Operating Activities Operating surplus/(deficit) 193 (186) - (664) Depreciation and amortisation expense Loss on disposal of non-current assets Unrealised (gain) / loss on foreign exchange Impairment of investments Changes in assets and liabilities: (Increase) / decrease in receivables 1, , (Increase) / decrease in prepayments (235) 64 (258) 83 Increase / (decrease) in payables 55 (1,272) 693 (1,543) Increase / (decrease) in accrued employee benefits Increase / (decrease) in other provisions Increase / (decrease) in other liabilities (97) (37) (97) (37) Net cash provided by / (used in) operating activities 2, ,339 (58) Parent 62 ANNUAL REPORT 16/17

63 Note 16 Commitments for Expenditure Lease Expenditure Commitments Consolidated Non-Cancellable Operating Lease Commitments under operating leases at reporting date (inclusive of non-recoverable GST input tax credits) are payable: Not later than one year 1,813 1,685 1,709 1,575 Later than one year but not later than five years 768 2, ,008 2,581 4,042 2,291 3,583 Parent Operating leases are entered into as a means of acquiring access to office accommodation and storage facilities. Lease payments are generally fixed, but with inflation escalation clauses on which contingent rentals are determined. Expenditure Commitments Material expenditure commitments (inclusive of non-recoverable GST input tax credits) contracted for at reporting date but not recognised in the accounts are as follows: Consolidated Parent Payable: Not later than one year 26,737 28,656 26,662 28,481 Later than one year but not later than five years 33,583 24,249 33,579 24,179 Later than five years 30 3, ,034 60,350 55,939 60,271 55,694 ANNUAL REPORT 16/17 63

64 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 17 Financial Instruments (a) Categorisation of Financial Instruments The Corporation has the following categories of financial assets and financial liabilities: Category Financial Assets Note Consolidated Cash and cash equivalents 9,838 7,581 6,407 4,026 Receivables 9 1,718 3,330 1,545 3,089 Other financial assets Forward exchange contracts Parent Total 11,556 10,953 7,952 7,157 Financial Liabilities Payables 12 6,582 6,527 6,645 5,952 Total 6,582 6,527 6,645 5,952 Financial assets and financial liabilities are presented separately from each other except for forward exchange contracts receivable and payable where offsetting has been applied. Refer to Note 10 Other Financial Assets for details of the gross forward exchange contracts receivable and payable. (b) Financial Risk Management The Corporation s activities expose it to a variety of financial risks credit risk, foreign exchange risk, and liquidity risk. Financial risk management is implemented pursuant to Government and Corporation policy covering specific areas such as mitigating foreign exchange risk and use of derivative financial instruments. These policies focus on the unpredictability of financial markets and seek to minimise potential adverse effects on the financial performance of the Corporation. The Corporation measures risk exposure using a variety of methods as follows: Risk Exposure Credit risk Foreign exchange risk Liquidity risk Measurement Method Ageing analysis, earnings at risk Foreign exchange sensitivity analysis Cash flow management 64 ANNUAL REPORT 16/17

65 (c) Credit Risk Credit risk exposure refers to a situation where the Corporation may incur financial loss as a result of another party to a financial instrument failing to discharge their obligation. The Corporation aims to reduce the exposure to credit default by ensuring it invests in secure assets and monitors all funds owed on a timely basis. Exposure to credit risk is monitored on an on-going basis. The following table represents the Corporation s maximum exposure to credit risk based on contractual amounts net of any allowances: Maximum Exposure to Credit Risk Category Note Consolidated Parent Financial Assets Receivables 9 1,718 3,330 1,545 3,089 1,718 3,330 1,545 3,089 The maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is the gross carrying amount inclusive of any allowance for impairment. The method for calculating any allowance for impairment is based on the age of the financial instrument. Any party with an outstanding obligation greater than 60 days and where there is objective evidence the Corporation will not be able to collect amounts due are included in the allowance for impairment, with the exception of grant monies from Queensland Government departments. No significant concentration of credit risk has been identified as exposure is spread over a large number of counterparties and customers. No financial assets have had their terms renegotiated so as to prevent them from being past due or impaired, and are stated at the carrying amounts as indicated. The following tables represent the Corporation s financial assets including those that are not overdue and those that are past due but not impaired and those that are impaired: Consolidated Financial Assets as at 30 June Receivables (not impaired) Not Overdue Less than 30 Days 30 to 60 Days 61 to 90 Days More than 90 Days Total 1, ,718 Receivables (impaired) Allowance for impairment , ,718 Financial Assets as at 30 June Receivables (not impaired) Not Overdue Less than 30 Days 30 to 60 Days 61 to 90 Days More than 90 Days Total 2, ,330 Receivables (impaired) Allowance for impairment , ,330 ANNUAL REPORT 16/17 65

66 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 17 Financial Instruments (c) Credit Risk (continued) Parent Financial Assets as at 30 June Receivables (not impaired) Not Overdue Less than 30 Days 30 to 60 Days 61 to 90 Days More than 90 Days Total 1, ,545 Receivables (impaired) Allowance for impairment , ,545 Financial Assets as at 30 June Receivables (not impaired) Not Overdue Less than 30 Days 30 to 60 Days 61 to 90 Days More than 90 Days Total 2, ,089 Receivables (impaired) Allowance for impairment , ,089 Movements in Allowance for Impairment Consolidated Balance at beginning of year Amounts recovered during the year - (14) - (14) Increase in allowance Balance at end of year Parent (d) Foreign Exchange Risk Foreign exchange risk arises when future transactions are denominated in non-australian currency. The Corporation operates nationally and internationally and is exposed to foreign exchange risk arising from currency exposures to the Euro, British Pound, US Dollar, Hong Kong Dollar, Japanese Yen, New Zealand Dollar, Singapore Dollar, Taiwan Dollar, Indian Rupee and South-Korean Won. The Corporation enters into forward foreign exchange contracts where available under which it is obliged to receive foreign currency at set exchange rates and pay a predetermined amount of Australian Dollars. The Corporation s risk management policy is to hedge between 50% and 100% of committed and forecast purchases denominated in foreign currency where settlement is within 12 months and up to 100% of committed purchases denominated in foreign currency where settlement is greater than 12 months. 66 ANNUAL REPORT 16/17

67 (d) Foreign Exchange Risk (continued) The fair value of forward exchange contracts held at 30 June is made up of the following (totalled per currency): Currency Contract Amount Financial Asset (Gross) $A 000 Contract Amount Financial Liability (Gross) $A 000 Contract Amount Financial Asset (Net) $A 000 Great British Pounds 1,194 1,194 - Euro 1,566 1,566 - US Dollar 1,194 1,194 - Singapore Dollar Hong Kong Dollar Japan Yen New Zealand Dollar ,260 7,260 - The Corporation intends to realise the receivable and settle the liability relating to forward exchange contracts simultaneously therefore the receivable and payable are offset and the net amount presented in the Statements of Financial Position. The following exchange rate sensitivity analysis depicts the outcome to profit and loss if exchange rates change by +/- 1% from the year-end rates applicable to the Corporation s financial assets and liabilities: Exchange Rate Risk Carrying Amount -1% Profit -1% Equity +1% Profit +1% Equity Forward exchange contracts receivable (e) Liquidity Risk Liquidity risk refers to the situation where the Corporation may encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Corporation manages its exposure to liquidity risk by ensuring sufficient funds are available to meet employee and supplier obligations at all times. This is achieved by ensuring minimum levels of cash are held within the various bank accounts to match the expected duration of the various employee and supplier liabilities. All payables are payable within one year. (f) Fair Value The forward exchange contracts used for hedging have been classified as Level 2 financial instruments. The fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities approximate their carrying amounts. The fair value of other monetary financial assets and financial liabilities is based on market prices where a market exists, or is determined by discounting expected future cash flows by the current interest rate for financial assets and liabilities with similar risk profiles. ANNUAL REPORT 16/17 67

68 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 17 Financial Instruments (continued) The fair value of trade receivables and payables is assumed to approximate the value of the original transaction, less any allowance for impairment. Note 18 Related Party Disclosures Transactions with the Minister and Minister Related Entities Hon Kate Jones is the Minister for the Department of Tourism, Major Events, Small Business and the Commonwealth Games. Grants from the Department to the Corporation are disclosed in Note 2. Transactions with Board members and Board member related entities In the ordinary course of business conducted under normal terms and conditions, Tourism and Events Queensland has dealt with the following Board members and Board member related entities. (a) (b) (c) (d) (e) (f) Mr Bob East is a Director of Tourism Australian and the Gold Coast Football Club and is the Chief Executive Officer of and holds shares in the Mantra Group. Net transactions between the Corporation and Tourism Australia during the year totalled a net receipt of $819,688 (GST inclusive). Transactions included receipts and payments relating to co-operative marketing campaigns and events activity and joint rental tenancy payments. Net transactions between the Corporation and the Mantra Group during the year totalled a net payment of $36,317 (GST inclusive). Transactions related to payments for accommodation and receipts for participant fees. Ms Julieanne Alroe is the Chief Executive Officer and Managing Director of Brisbane Airport Corporation Pty Ltd. Transactions between the Corporation and Brisbane Airport Corporation during the year totalled a net payment of $59,664 (GST inclusive) relating to co-operative marketing campaign and event activities. Mr Paul Donovan is the Executive General Manager Business Development and Marketing for Queensland Airports Limited (owner and operator of the Gold Coast Airport) and Chairman of Gold Coast Tourism and Canford Group Advisory Committee. Net transactions between the Corporation and Gold Coast Tourism during the year totalled a net payment of $1,581,006 (GST inclusive). Transactions included Tourism Network funding, Business Events Bureau funding, payments for staff secondment and receipts relating to stand-alone advertising booked through the Corporation s co-operative marketing services provider and co-operative marketing airline campaigns. Mr Gary Smith is the Chairman of the Flight Centre Travel Group Ltd and Tourism Leisure Corporation Pty Ltd (which holds interests in a number of businesses including Kingfisher Bay Resort, Eurong Beach Resort and Fraser Explorer Tours). Net transactions between the Corporation and the Flight Centre Travel Group for the year totalled a net payment of $1,104,001 (GST inclusive). Transactions primarily related to strategic partnership joint marketing activities. Net transactions between the Corporation and Kingfisher Bay Resort for the year totalled a net receipt of $33,732 (GST inclusive) relating to receipts for marketing initiatives. Professor Judith McLean is the Queensland Performing Arts Centre s Scholar in Residence. Net transactions between the Corporation and the Queensland Performing Arts Trust for the year totalled a net payment of $605,133 (GST inclusive) relating primarily to event funding instalments. Ms Anna Guillan is a Director of Tourism Australia and Regional Director Sales and Marketing Australia & New Zealand Kerzner International (managers during the year of One&Only Hayman Island owned by Mulpha Australia). Net transactions between the Corporation and Tourism Australia for the year totalled a net receipt of $819,688 (GST inclusive). Transactions included receipts and payments relating to cooperative marketing campaigns and events activity and joint rental tenancy payments. 68 ANNUAL REPORT 16/17

69 Note 18 Related Party Disclosures (continued) Transactions with Board members and Board member related entities (continued) (g) (h) (i) (j) Mr Damien Walker is a Board Member of the Gold Coast 2018 Commonwealth Games Corporation (GOLDOC). Net transactions between the Corporation and GOLDOC totalled a net payment of $727,582 (GST Inclusive). Transactions primarily related to a marketing agreement and merchandise payments. Ms Karen Hanna-Miller was a Board Member of Queensland Music Festival during the -17 financial year. Net transactions between the Corporation and Queensland Music Festival during the year totalled a net payment of $44,000 (GST inclusive) for partnership and destination and events program payments. Mr James Dixon is a member of the Queensland Tourism Industry Council (QTIC) s Transformation Committee and Co-Managing Director of Down Under Tours Australia. Net transactions between the Corporation and QTIC during the -17 financial year totalled a net payment of $461,570 (GST inclusive) for partnership agreements. There were no transactions between the Corporation and Down Under Tours Australia during 8 to 30 June. Mr Michael Healy was a Director of Sales and Marketing at Quicksilver Group during the -17 financial year. Net transactions between the Corporation and Quicksilver Group during the year totalled a net receipt of $17,380 (GST inclusive) relating to receipts for marketing initiatives. Transactions with Controlled Entities In the ordinary course of business conducted under normal terms and conditions, Tourism and Events Queensland dealt with the Tourism and Events Queensland Employing Office and Gold Coast Events Management Ltd. The parent entity provided funding to: Gold Coast Events Management Ltd for the operation and management of the Gold Coast Airport Marathon and Pan Pacific Masters Games in the amount of $660,000 (GST inclusive) for the year ended 30 June ; and Tourism and Events Queensland Employing Office for the provision of employment services in the amount of $15,736,957 for the year ended 30 June. The parent entity recognised co-operative marketing income of $144,778 (GST inclusive) from Gold Coast Events Management Ltd for the year ended 30 June relating to joint marketing campaigns. ANNUAL REPORT 16/17 69

70 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 19 Board Remuneration The role of the Board is to provide strategic direction and effective governance over the Corporation s affairs to ensure it discharges its legislated responsibilities while regarding the interests of all stakeholders including the tourism industry, employees, suppliers and local communities. Further information on the Board can be found in the body of the Annual Report under the section relating to Corporate Governance. Position Chairman* Deputy Chairman* Board Member* Board Member* Board Member* Board Member* Board Member* Name Bob East Julieanne Alroe Paul Donovan Gary Smith Dr Judith McLean Anna Guillan Karen Hanna-Miller Board Member* Michael Healy, ceased 21 March Board Member* James Dixon, appointed 8 June Board Member** Director-General Tourism, Major Events, Small Business and the Commonwealth Games * Appointment authority Governor in council ** Appointment Authority Permanent member under Tourism and Events Queensland Act ANNUAL REPORT 16/17

71 Note 19 Board Remuneration (continued) Remuneration policy for the Corporation s Board is set by the Governor in Council as provided for under the Tourism and Events Queensland Act Remuneration for Board members comprises the following components: Short term employee expenses which include board member fees and mileage allowance Post-employment expenses which include superannuation contributions 1 July 30 June Position Name Short Term Employee Expenses Post- Employment Expenses Total Expenses Chairman Bob East Deputy Chairman Julieanne Alroe Board member Paul Donovan Board member Gary Smith Board member Dr Judith McLean Board member Anna Guillan Board member Karen Hanna-Miller Board member, ceased 21 March Michael Healy Board member, appointed 8 June James Dixon Board member Director-General July June Position Name Short Term Employee Expenses Post- Employment Expenses Total Expenses Chairman Bob East Deputy Chairman, reappointed 3 August 2015 Julieanne Alroe Board member, reappointed 3 August 2015 Paul Donovan Board member, reappointed 3 August 2015 Gary Smith Board member, reappointed 3 August 2015 Dr Judith McLean Board member, reappointed 3 August 2015 Anna Guillan Board member, appointed 3 August 2015 Karen Hanna-Miller Board member, appointed 3 August 2015 Michael Healy Board member Director General Board member, ceased 2 August 2015 James Corvan 1-1 Board member, ceased 2 August 2015 Libby Marshall 1-1 Board member, ceased 2 August 2015 Garth Prowd OAM 1-1 Board member, ceased 2 August 2015 Liz Ward 1-1 Board member, ceased 2 August 2015 Ian Gillespie 1-1 Board member, ceased 2 August 2015 Alan Smith 1-1 ANNUAL REPORT 16/17 71

72 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 20 Investments in Controlled Entities The Corporation s investment in controlled entities comprises the following: Directly Controlled Entity Tourism and Events Queensland Employing Office - - Gold Coast Events Management Ltd - - Total investment in directly controlled entities - - Reconciliation of investment in controlled entities Opening balance at 1 July Additions - - Impairment losses - (664) Closing balance at 30 June - - Fair value of the Corporation s investment in Gold Coast Events Management Ltd represents net assets at balance date. The Corporation recognised an impairment loss via the Statement of Comprehensive Income in. The following entities are controlled entities of the Corporation: Name of Directly Controlled Entity % Interest in Entity & Basis for Control Purpose & Principal Activities of Entity Total Assets Total Liabilities Total Revenue Operating Result Tourism and Events Queensland Employing Office 100% The Tourism and Events Queensland Employing Office is established as a Statutory Body under the Tourism and Events Queensland Act 2012 The Tourism and Events Queensland Employing Office s objective is to provide employment services to the Corporation. 3,274 3,134 3,274 3,134 15,736 15, Gold Coast Events Management Ltd The Corporation is the sole member of the company limited by guarantee Gold Coast Events Management Ltd trades as Events Management Queensland and operates the Gold Coast Airport Marathon and the Pan Pacific Masters Games. 3,774 3,990 3,536 3,946 6,289 4, (187) Controlled Entities Comprising the Economic Entity The consolidated financial statements of the economic entity comprise the transactions and balances of the Corporation and the directly controlled entities listed above. The auditor for the Corporation and all controlled entities is the Auditor-General of Queensland. 72 ANNUAL REPORT 16/17

73 Note 21 Contingencies As at 30 June, potential payments in accordance with contractual commitments totalled a maximum of $8.6 million payable over five years. Note 22 Events Occurring after Balance Date There were no events that occurred after balance date which would materially affect the financial statements or disclosures. Note 23 Budget vs Actual Comparison This note discloses the Corporation s original published budgeted figures for -17 compared to actual results, with explanations of major variances, in respect of the Corporation s Statements of Comprehensive Income, Statements of Financial Position and Statements of Cash Flows. Budget to Actual Comparison - Statement of Comprehensive Income Variance Notes Original Budget Parent Actual Variance Income from Continuing Operations Grants and other contributions 1 102, ,667 4,931 Cooperative income 2 10,000 7,898 (2,102) Other revenue , Total Income from Continuing Operations 113, ,643 3,307 Expenses from Continuing Operations Marketing, development and events support expenses 4 49,447 48,489 (958) Grant payments 4 39,820 43,765 3,945 Employee expenses 17,965 18, Depreciation and amortisation Other expenses 5,704 5, Total Expenses from Continuing Operations 113, ,643 3,307 Operating Result from Continuing Operations Other Comprehensive Income Total Comprehensive Income The parent entity s Original Budget for Expenses from Continuing Operations has been reclassified to align with the classification of line items of the corresponding actual financial statements of the parent entity. ANNUAL REPORT 16/17 73

74 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 23 Budget vs Actual Comparison (continued) Budget to Actual Comparison Statement of Financial Position Current Assets Variance Notes Original Budget Parent Actual Variance Cash and cash equivalents 5 4,775 6,407 1,632 Receivables 5 3,721 1,545 (2,176) Other financial assets (116) Other current assets Total Current Assets 8,789 8,298 (491) Non-Current Assets Property, plant and equipment 8 1, (676) Investments (745) Total Non-Current Assets 1, (1,421) Total Assets 10,788 8,876 (1,912) Current Liabilities Payables and other current liabilities 10 7,798 6,803 (995) Accrued employee benefits Total Current Liabilities 8,265 7,271 (994) Non-Current Liabilities Other non-current liabilities (254) Total Non-Current Liabilities (254) Total Liabilities 8,579 7,331 (1,248) Net Assets 2,209 1,545 (664) Equity Contributed equity 12,908 12,908 - Accumulated deficit (10,699) (11,363) (664) Total Equity 2,209 1,545 (664) The Parent entity s Original Budget for Payables and Accrued employee benefits has been reclassified to align with the classification of line items of the corresponding actual financial statements of the parent entity. 74 ANNUAL REPORT 16/17

75 Note 23 Budget vs Actual Comparison (continued) Budget to Actual Comparison - Statement of Cash Flows Variance Notes Original Budget Parent Actual Variance Cash flows from operating activities Inflows: Revenue from Government received , ,271 5,535 Receipts from customers 10,590 10, Interest received Outflows: (48) Payments to suppliers and employees (112,678) (117,065) (4,387) Net cash flows used in operating activities 848 2,339 1,491 Cash flows from investing activities Inflows: Proceeds from forward contracts Outflows: 13-7,308 7,308 Payments for forward contracts 13 - (7,266) (7,266) Payments for property, plant & equipment 8 (400) Net cash flows (used in) / provided by investing activities Net (decrease) / increase in cash and cash equivalents (400) ,381 1,933 Cash and cash equivalents at beginning of the year 4,327 4,026 (301) Cash and cash equivalents at end of financial year 4,775 6,407 1,632 Explanations of Major Variances Statement of Comprehensive Income 1. The increase is principally explained by other special initiative grants received from State and Commonwealth Government agencies during - 17 to fund one off major events. 2. The decrease reflects lower than expected revenues directed through the Corporation s accounts by industry and other partners in jointly managed marketing campaigns and event activity during -17 ($2.0 million). Where appropriate and cost effective, partner contributions are expended directly by the partner on joint activities rather than directed through the Corporation s accounts in order to benefit from the buying power of partners and resultant efficiencies in administration. 3. The increase is primarily made up of unbudgeted returned event funding ($0.05 million) and additional sundry income ($0.2 million). Event funding instalments are refunded when necessitated by contractual conditions. Return of such funding cannot be anticipated and is therefore not budgeted. The sundry income primarily relates to tax refunds from international offices that were not budgeted and rental monies for the sublet of a portion of leased office area. 4. The slight decrease in marketing, development and events support expenses is offset by the increase in grant payments expense. The reallocation between the two categories of spend are in line with approved programs related to the additional special initiative grant funding. ANNUAL REPORT 16/17 75

76 Tourism and Events Queensland Notes to and forming part of the Financial Statements for the year ended 30 June (continued) Note 23 Budget vs Actual Comparison (continued) Explanations of Major Variances (continued) Statement of Financial Position 5. The increase to cash and cash equivalents and the reduction to receivables reflects the earlier receipt of monies (relating to invoices in the final quarter of the year) than originally forecast in the year budget. The year budget included an assumption around the timing of receivables being similar to the year budget and the earlier receipt of these monies and invoice payments has resulted in a higher closing cash and cash equivalents balance offset by the lower receivables and payables balance. 6. Other financial assets represents the Corporation s net forward exchange contracts receivable. The closing net receivable is represented by the revaluation of the contracts on hand at balance date in line with market fluctuations in current forward exchange rates for contracts with similar maturity profiles. The closing balance is a direct result of the Corporation placing hedges at 30 June which did not require revaluation and wasn t originally anticipated at the time of budget approval. 7. The increase is due to a prepayment for an event where the event owner requested the Corporation to bring forward financial contributions to meet upfront expenditure to secure venues, accommodation etc. Whilst this payment was budgeted, the year budget did not anticipate the prepayment of this expense. 8. The decrease is primarily due to a reduced capital program relating to changed strategy for ICT service provision. 9. The reduction is due to the unbudgeted impairment of the Corporation s investment in Gold Coast Events Management Ltd and reflects the strategy to limit funds held as retained earnings in the controlled entity which was implemented late in the year. The year budget did not reflect this reduction as the reduction in net asset value of the investment was not known until after the approval of the budget. 10. The decrease reflects a difference in timing for activity completed in the final quarter of the year with the earlier receipt of invoices and the associated payments being processed before 30 June. 11. The decrease is due to the annual adjustment to rent payable liability to recognise lease straight lining. Statement of Cash Flows 12. The increase is principally explained by other special initiative grants received from State and Commonwealth Government agencies during -17 to fund one off major events. 13. Payments and proceeds for forward exchange contracts were net off in year budget cashflow. The impact of foreign currency translation on proceeds cannot be reliably forecast at the time of budget approval. 76 ANNUAL REPORT 16/17

77 Management Certificate Tourism and Events Queensland and Its Controlled Entities These general purpose consolidated financial statements have been prepared pursuant to section 62(1) of the Financial Accountability Act 2009 (the Act), relevant sections of the Financial and Performance Management Standard 2009 and other prescribed requirements. In accordance with section 62(1)(b) of the Act we certify that in our opinion: (i) (ii) (iii) the prescribed requirements for establishing and keeping the accounts have been complied with in all material respects; the consolidated financial statements have been drawn up to present a true and fair view, in accordance with prescribed accounting standards, of the transactions of Tourism and Events Queensland for the year ended 30 June and of the financial position of the Corporation as at the end of that year; and these assertions are based on an appropriate system of internal controls and risk management processes being effective, in all material respects, with respect to financial reporting throughout the reporting period.... DATE: / / B EAST Chairman... DATE: / / J ALROE Board Member... DATE: / / L CODDINGTON BBus(HosMgt) GAICD Chief Executive Officer... DATE: / / N ELLIOTT BCom FCPA GAICD Group Executive Corporate Services and Chief Financial Officer ANNUAL REPORT 16/17 77

78 INDEPENDENT AUDITOR S REPORT To the Board Tourism and Events Queensland Opinion I have audited the financial report of Tourism and Events Queensland and the consolidated entity comprising the statutory body and its controlled entities, which comprises the consolidated statement of financial position as at 30 June, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash for the year then ended, notes to the financial statements including significant accounting policies and other explanatory information, and the management certificate. In accordance with s.40 of the Auditor-General Act 2009 (a) (b) (c) I have received all the information and explanations which I have required; I consider the prescribed requirements in relation to the establishment and keeping of accounts have been complied with in all material respects; and In my opinion, the accompanying financial report gives a true and fair view of the financial position of Tourism and Events Queensland and the consolidated entity as at 30 June, and of its financial performance and its cash flows for the year then ended in accordance with the prescribed requirements under the Financial Accountability Act Basis of Opinion I conducted the audit in accordance with the Auditor-General of Queensland 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 Report section of my report. I am independent of the entity in accordance with the Auditor-General Act 2009 and the ethical requirements of the Accounting Professional and Ethical Standards Board APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Australia. I have also fulfilled my other ethical 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. Responsibilities of the Board for the Financial Report The Board is responsible for the preparation of the financial report that gives a true and fair view in accordance with prescribed requirements of the Financial Accountability Act 2009 and its subordinate legislation, the Financial and Performance Management Standard These prescribed requirements include the Australian Accounting Standards and having regard to the minimum reporting requirements included in the Financial Reporting Requirements for Queensland Government Agencies. The Board s responsibility also includes such internal control as the Board determines is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Board is responsible for assessing the entity s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so. Auditor s Responsibilities for the Audit of the Financial Report My objectives are to obtain reasonable assurance about whether the financial report as a whole is 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 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 this financial report. 78 ANNUAL REPORT 16/17

79 As part of an audit in accordance with the Australian 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 report, 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 management. Conclude on the appropriateness of management 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 report 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. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion. I communicate with those charged with governance 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. N GEORGE CPA (as Delegate of the Auditor General) Queensland Audit Office Brisbane ANNUAL REPORT 16/17 79