History - 1993-1996

Since its inception, QTC had made ongoing progress in improving its services to clients and improving the efficiency and effectiveness of its fund raising and liability management strategies. As it grew and developed, QTC’s technical expertise, particularly in the management of client financing arrangements, became a particular strength. This expertise was soon highly sought after by the Queensland Government sector. QTC found itself building a reputation as an accomplished manager of liquidity and financial risk, with its services more in demand than ever before.

With its role changing since its transition to an autonomous and accountable central financing authority, QTC extended its focus to deliver a wider range of financial products and services to the Queensland public sector. The impact of structural changes and reforms such as the National Competition Policy, industry deregulation, restructures and privatisations, and the continued demand for publicly-funded services and infrastructure created a stronger emphasis on QTC’s role as the Queensland public sector’s corporate treasury. Increasingly, QTC’s clients were seeking new, more sophisticated and more effective solutions to meet the financial issues created by those demands.

As QTC grew from focusing solely on its funding operations, to developing a client-service-driven culture with a range of products and services aimed at meeting the needs of Queensland’s public sector, it quickly recognised the need for a more client-centric approach to its business. With its clients’ needs changing, in the 1992-93 financial year QTC developed new structures to meet the changing needs and expectations of these clients and provide them with independent corporate advisory services. These new structures allowed it to construct more individualised facilities, and enabled the organisation to place the delivery of client value on an equal footing with its high quality technical financial expertise.

The new client services program, which began on 1 July 1993, maintained QTC’s existing benefits for clients while providing the flexibility for clients to tailor their funding facilities to meet more specifically their liability management needs. A new range of debt pools was introduced, with the multiple pool structure (one or more of four common debt pools) meeting the changing needs and expectations of clients and allowing them to achieve the debt profile and interest rate exposure most appropriate to their business needs.

In the 1995-96 financial year, QTC reconsidered its strategic approach and embraced a client loyalty operating model. This developed after recognising that while QTC’s technical and financial expertise had achieved economies of scale and scope for its clients, the clients’ interactions with QTC could improve. This new major strategic direction was introduced to focus QTC’s resources on client service delivery and the development of client relationships.

To endorse its commitment to client services, a new mission statement and organisational structure were introduced to enable QTC to deliver value to its customers. This focused on forming strong and effective partnerships with QTC’s clients, to provide excellence in all aspects of these relationships.

Greater flexibility for clients was also provided through the expansion of the debt pool structure to five generic pools, to accompany its highly structured and specialised financing facilities and an increased capacity to offer corporate policy and advisory services.

This new strategic approach, with its underlying shift in both philosophy and operations, represented one of the most significant reforms undertaken by QTC to date. QTC moved to ensure all its clients had access to appropriate skills and information to help them effectively manage their financial risks, to become a financial services provider that continually adds value and provides benefits to all its clients. Feedback from clients indicated this fundamental shift in service provision greatly assisted in strengthening communication and understanding to enhance QTC’s role in tailoring financial solutions that add value to its clients’ businesses.

Client value continues at the forefront of QTC’s operations to this day. QTC strives to deliver the best possible outcomes for Queensland’s public sector, supporting and developing long-lasting and trusting relationships with its colleagues, clients and investors, to create and deliver unique and relevant value as partners in financial solutions.

Image: QTC managers monitor movements in the international capital markets, 1995.

QTC’s commitment to its clients continued with the establishment of client-specific funding models and debt pools. This represented a significant innovation and major point of difference between Queensland and the rest of Australia’s governmental financial community. Where other states operated on a back-to-back lending model, and subsequently became driven by the transactions necessary to maintain this practice, QTC adopted a model that enabled QTC to more effectively manage its borrowing and onlending activities in response to the dynamic conditions of the marketplace.

Acknowledging that most clients were primarily concerned with the cost of their financing and associated refinancing risk over time, QTC designed a pool structure that would reduce these risks and overcome the problem of declining duration. Ultimately offering a set of debt pools that catered to three, six, nine, 12 and 15 year terms, along with a short-term 50 day floating rate pool, QTC was able to reduce administrative costs for its clients by providing them with one loan facility, rather than a multitude of individual loans.

While the generic debt pool structure proved attractive to smaller clients, the specific infrastructure needs of QTC’s larger borrowing clients like Queensland Rail and the various electricity authorities warranted a more tailored approach. Using the same model as the generic debt pools, QTC began offering individually designed pools with client-specific capabilities that allowed the client to avoid the prohibitive costs of back-to-back liabilities. This approach ensured QTC could deliver value to its clients and respond to the dynamic environment in which they operated to offer innovative and flexible approaches to their financing requirements.

QTC’s new client-focused model provided the drive for innovative changes in systems and processes within the organisation. To achieve its objectives in providing advanced client services, QTC recognised that an appropriate sophistication in information technology would be required to manage information and knowledge flows within the business and between the organisation and its clients and partners.

With this in mind, QTC began investing in advanced information technology systems based on best-practice methodologies. By adopting an open approach and philosophy to its information management processes, QTC was able to better partner with its clients and investors to deliver quality financial solutions. QTC’s practices were based on the capture and sharing of knowledge freely across the organisation and between its partners, to better understand its clients’ concerns and foster a collaborative approach to developing and delivering solutions.

Mirroring its approach to its client and investor partners, QTC also fostered a culture of information sharing and transparency in its internal business operations. This enabled all employees to share information and collaborate, and aided QTC to become a central store of knowledge, experience and expertise on lending and investment activities, financial structures and transactions, as well as the risks and benefits they encompass.