History - 1964-1987

Image: Brisbane Executive Building, 1977. Courtesy of Brisbane City Council.

In the early 1960s, the Queensland Government was the first state government in Australia to centralise its cash management functions and optimise returns from the investment of the Government’s surplus cash balances. This function was undertaken by the Investments Branch of the Queensland Treasury Department, with funds invested in fixed-interest securities and the short-term money market.

In 1981, the Australian Government’s Campbell Committee undertook an extensive examination of the workings of the Australian Financial System and proposed the establishment of state-based central borrowing authorities. The subsequent Campbell Report highlighted the significant economies of scale and benefits that could be achieved by introducing central borrowing authorities in each state. The Report also outlined how rationalisation could dispense with competition between local and semi-government authorities on the open market, ensuring that smaller authorities would not be disadvantaged due to their size. The Report foresaw that central borrowing authorities would increase the marketability of each state’s credit, making their securities more attractive to investors and enabling some reduction in yields, with subsequent savings.

In 1984, to centralise the management of its liabilities, the Queensland Government established QTC’s predecessor, the Queensland Government Development Authority (QGDA). The QGDA was the first operational central borrowing authority in Australia, formed primarily in response to the deregulation of the Australian financial market occurring at the time and the recommendations from the Campbell Report.

The QGDA’s objective was to support the development of, and provision of financial services in, Queensland, by raising funds both onshore and offshore to lend to various Queensland statutory bodies. All borrowings by the QGDA were guaranteed by the Treasurer on behalf of the Queensland Government.

The QGDA was administered by officers of the Queensland Treasury Department. Financial transactions associated with the operations of the QGDA were processed through the Queensland Government Development Authority Fund—a trust maintained within the Public Accounts of Queensland. In addition to its central borrowing agency function, the QGDA from time to time entered into other financial arrangements consistent with its role of assisting the development of Queensland.

Image: Lucinda Bulk Sugar Loading Jetty. Courtesy of Queensland Sugar Limited.

Recognising that the development of innovative funding solutions for the State of Queensland required specialist expertise and talent, Sir Leo Hielscher AC, as Under Treasurer, adopted a policy of hiring new university graduates. Although considered quite radical at the time, this policy quickly paid off, with the employment of talented people such as John Hall, who eventually rose to become Under Treasurer of Queensland upon Sir Leo’s retirement in 1988.

In 1979, John Hall hired Stephen Rochester to be a member of the Department’s new Intergovernmental Relations section. Stephen (who later became QTC’s first Chief Executive Officer) had been working as an economist for the Bank of New South Wales for more than a decade and brought expertise that would break new ground for Queensland—with innovative ideas for sources of funding, particularly offshore.

In the late 1970s, the Queensland Treasury Department negotiated the first major deal that would export sugar to Japan on a large scale. The profit margin on the deal allowed the Queensland Treasury Department and the Queensland Sugar Board to plan the construction of the Mourilyan and Mackay Sugar Terminals and the Lucinda Bulk Sugar Loading Jetty in Far North Queensland—at the time, the longest structure of its type, requiring a design that took into account the curvature of the earth.

A dramatic drop in the spot price of sugar during the negotiations resulted in a shortfall in funding for this capital works projects. With the approval of the Australian Government, the Queensland Treasury Department—under the guidance of Sir Leo Hielscher AC and John Hall—negotiated the first overseas loan by a state authority. The transaction foreshadowed more permanent, Australia-wide arrangements that eventually would be approved by the Loans Council. Given his international banking experience, Stephen Rochester was enlisted to provide support in managing the foreign currency exposures.

The Lucinda funding solution represented the innovation and creativity that was taking seed in those early days, finding new ways to address complex funding and advisory problems for whole-of-State outcomes.

This spirit of innovation runs throughout QTC today, with teams of talented experts providing unique solutions to create value for QTC’s investors, clients and government partners. In this way, QTC works to secure Queensland’s financial success, now and into the future.