I am pleased to present the department’s 2017–18 Annual Report, our first since the release of the 2017 Foreign Policy White Paper. The White Paper—a signature achievement during the performance year—provides a comprehensive framework to advance Australia’s security and prosperity over the coming decade. It is Australia’s first foreign policy white paper in 14 years, fully integrating our foreign, trade, economic, security and development policies.

Frances Adamson, Secretary​

A complex and fast-changing world

Powerful drivers of change in the international system are converging in ways that are challenging Australia’s interests.

The White Paper makes clear that Australia will need to pursue its national interests in a more competitive and contested world. Now, more than ever, our global environment does not draw distinctions between our foreign policy, trade, economic, security and development interests. We will have to work harder to maximise our international influence and secure our national interests, the prosperity of Australia, the independence of our decision-making, and the security, safety and freedom of our people.

The year in review

Since the White Paper’s release, we have supported ministers in leading its implementation across government. We have made significant progress.

The department has been active in shaping an Indo-Pacific region that is open, inclusive and prosperous. We spearheaded Australian efforts to deepen and broaden our partnership with the United States and to encourage it to remain constructively engaged in the region. We deepened cooperation with major Indo-Pacific democracies, including by strengthening regional groupings, such as the revived Australia–India–Japan–United States quadrilateral dialogue. We strengthened ties with ASEAN—Southeast Asia’s strategic convenor—including through the March ASEAN–Australia Special Summit.

We supported Australia’s substantial interests in our relationship with China, celebrating the 45^th anniversary of bilateral relations during the year. Our long history, deep economic relationship and growing people-to-people links provide considerable ballast for a relationship central to both our interests.

We supported the government’s stepped-up engagement in the Pacific, including through the high-speed undersea cables initiative linking Papua New Guinea, Solomon Islands and Australia that will provide more reliable telecommunications. Our development assistance to the Pacific was the largest of any region in 2017–18, totalling $1.04 billion. This, together with our work to design a new Australia–Pacific Security College, sign security agreements with Solomon Islands, Tuvalu and Nauru, and support labour mobility and much-needed economic infrastructure has helped ensure Australia remains a partner of choice in the Pacific.

The department has helped the government deliver more opportunities for Australian business globally and stand firm against protectionism. We supported the Minister for Trade, Tourism and Investment to successfully negotiate and sign the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11) and a bilateral free trade agreement with Peru, made concrete progress on free trade agreement negotiations with Indonesia, Hong Kong and Pacific Alliance partners, and launched negotiations with the European Union.

There is no higher priority for government than to keep its citizens safe, secure and free. We helped the government make significant progress in the fight against ISIL, dealing with the threat of foreign fighters and delivering an International Cyber Engagement Strategy. We contributed to the strong international response to Russia’s use of chemical weapons in the United Kingdom and co-led international efforts to seek accountability for the downing of Malaysia Airlines flight MH17. We continued our efforts to deliver a modern, efficient, cost-effective passport and consular service to Australians—a complex task at a time when Australians are travelling overseas in unprecedented numbers.

Protecting and promoting international rules and norms has become a vital aspect of our work over the last year, particularly in the face of sharper challenges. We worked across government to oppose protectionism and bolster international support for global trade rules and economic architecture. We have similarly responded to rear-guard actions aimed at undermining global rules and norms around non-proliferation, disarmament and chemical weapons. We have used international law to resolve peacefully our maritime boundary dispute with Timor-Leste. As a member of the United Nations Human Rights Council, we are supporting the multilateral human rights system. Our comprehensive victory in disputes against Australia’s tobacco plain packaging measure upheld the rights of World Trade Organization members to regulate in the public interest within an international trade rules-based framework.

Australia’s development assistance program is a reflection of our values and an investment in regional and global stability and prosperity. In 2017–18 our aid program was well-targeted and innovative. It focused on where our efforts and expertise had the greatest impact. We continued to support better state capability to improve governance and reduce poverty and inequality and helped our neighbours respond to natural disasters and humanitarian crises. Our aid program has magnified the influence Australia has brought to bear on pressing regional and global problems, including efforts to meet the Sustainable Development Goals and address regional security threats.

The quality and reach of our diplomacy affects Australia’s ability to exert influence. We have examined our culture, capability and operating model to ensure the department is fit for purpose into the future. We have revised the department's organisational structure and are allocating our resources to align with the strategic direction and priorities of the White Paper.

We are rolling out our new workforce strategy. It will prioritise capability and focus on core attributes of innovative thinking, flexibility, effective communication through modern platforms and intelligent engagement with risk, reinforced by a diverse workforce. Our Diplomatic Academy, a leading-edge learning and development hub, is giving all staff across government the skills and capabilities they need to support an ambitious international engagement agenda.

Delivering our broader workforce strategy will take time. But I am encouraged by the successful implementation of our Women in Leadership (WIL) strategy and our work in seeking to build a more diverse and higher-performing workforce. The WIL strategy is driving deep cultural change and opening up new ways of working to improve gender equality, helping staff reach their full potential and enhance productivity. Forty per cent of our heads of mission and posts overseas are women and, in May, Australia's first Indigenous female head of mission was appointed Ambassador to Spain.

Through our innovationXchange, we are finding ways to achieve better outcomes with our current resources, and to respond to new policy, program and service delivery challenges. Our innovative mobile-enabled web platform, Tupaia, is improving healthcare access across the Pacific.

Rapid and unprecedented pace of change in the international environment requires us to use more efficient and cost-effective technologies to support our overseas engagement, including as we expand our diplomatic network. In 2017–18 we successfully delivered the International Communications Network—a five-year initiative to enhance, modernise and replace networks at over 174 sites globally. This is the most significant ICT investment ever undertaken in the department’s history. The rollout of reDESIGN, our new corporate services ‘hub and spoke’ model, in North America, Europe and North Asia is streamlining administrative processes, reducing duplication and freeing up posts to focus on policy, advocacy and service delivery.

The department continued to demonstrate strong financial performance in 2017–18.

Outlook for 2018-19

Australia will continue to advance its interests in a more contested and competitive international environment. The regional and global rules and institutions that help guide trade and investment and maintain security are under strain. Australia faces substantial security challenges posed by nuclear proliferation, terrorism, technological advances, demographic shifts, climate change and new global power balances. If current trends persist, Australia will be making its way in an even more difficult economic and security environments.

In this dynamic environment, Australia must seek opportunities while protecting our interests in the face of complexity and uncertainty. Australia will use science, technology, regional growth and existing international rules and systems to improve productivity, harness new sources of economic prosperity and promote security for Australia and Australians.

We will maintain an active, determined and agile foreign policy, anchored on strong domestic foundations. The White Paper will help us retain clarity about our long-term objectives and a steadiness of purpose in ensuring Australia’s prosperity and security strengthen in this complex and fast-changing world.