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Wednesday, 15 February 2017
Page: 1018

Senator PATERSON (Victoria) (16:13): Can I begin by thanking Senator Hanson and One Nation for raising this issue in the chamber and for their public advocacy about this issue because I absolutely share their concern about both the remuneration received by the CEO of Australia Post and, even more importantly in many ways, the way in which Australia Post tried to conceal that information from the public to prevent exactly this sort of debate from occurring in the chamber and in the community.

I should make two quick relevant declarations. Senators may be aware that their former colleague and my predecessor, the much beloved Michael Ronaldson, was recently appointed to the board of Australia Post, although this is not something that I have canvassed with him. And I have been lucky enough to chair the relevant committee, the Senate Environment and Communications Legislation Committee. I can share with the Senate that, unfortunately, I will no longer be chairing this committee as I am going on to other things, but I will come to that in a moment.

As senators would be aware, in the last round of Senate estimates, Senator Urquhart and Senator Dastyari asked a series of questions to the CEO of Australia Post about the executive remuneration policies at Australia Post. In my view it should not have been necessary for them to ask these questions, because the standard practice at Australia Post in the past has been to publish in their annual report this information, but Australia Post recently ceased to publish that information for reasons which I will come to in a moment, so it was necessary for senators Urquhart and Dastyari to question them on this. At Senate estimates the CEO took the questions on notice, was not able to provide the questions immediately and undertook to get back to the Senate with his answers. Australia Post took the full amount of time available through the estimates process before they replied to the committee, which is their right, but I suspect that it would have been easy and quick for them to find this information. I do not think it would have taken much digging for them to find this information.

When Australia Post did decide to provide the information to the committee, they requested that they do so only on the basis that it be given to us confidentially. This is a deeply concerning thing which I spoke about in the Senate last week when we first tabled this information in the Senate. It is disturbing for a number of reasons. Firstly, as all senators are aware, Senate estimates is required to be conducted entirely in public. It is not permissible for the Senate to receive information during estimates that is not public. Secondly, it is up to the Senate committee itself to determine whether in normal circumstances a witness can provide information on a confidential basis. It is for the Senate committee to invite the witness to provide it on a confidential basis; it is not for a witness to take it upon themselves to provide it on a confidential basis, and yet that is what Australia Post requested.

The committee, through me and the secretariat, engaged in an exchange of letters over a number of months with Australia Post to ask them to substantiate their claim that it was necessary that this information not be made public. I have to say I was disappointed with the sorts of reasons that Australia Post provided to the committee, and that was one of the reasons the committee saw fit to release all the correspondence and the information provided by Australia Post last week in the Senate. Among the reasons that Australia Post requested that the information remain confidential was that it could potentially damage the organisation in a commercial sense, that it could breach the privacy of the individuals involved and that it could damage the reputations of the individuals involved.

Australia Post also asked the committee, if we were to decide to release the information, to give them a grace period of about a week before releasing the information, to allow them to prepare some stakeholder management before it was to become public and, obviously, an item of interest in the media. This was something which was also of great concern to the committee. It is not an option for the committee, once it has decided to receive information and to publish it, to withhold publishing it for the convenience of an organisation which was obliged to provide that information in public in the first place. I suppose we have seen, in the media coverage over the past week, why Australia Post was reluctant to have this information in public and why they wanted time to manage their response. But just because there is tough public scrutiny of the expenditure of public money does not mean that it is acceptable for the Senate to participate in shielding that information from the Australian public.

I am personally very glad that this information is public and I am glad we have had the debate about it that we have had over the past week. My view is that it is the role of the board of an organisation to set the remuneration policies for that organisation, including a government business enterprise, but they should do so mindful of the fact that it is a government business enterprise, that it is wholly owned by Australian taxpayers, that over its many decades of history it has received substantial assistance from taxpayers, particularly in the form of monopoly protection from competition, and that its current profitability and current performance are inextricably linked to the taxpayer support it has received over its history. So to argue, as Australia Post did, that in some way it should not be required to make this information public, because Australia Post has made disbursements to the government and has been a source of revenue for the government in recent years, was another concerning aspect of our interaction with Australia Post. The very fact that taxpayers do receive money from Australia Post and it is a significant sum of money is one of the reasons we are entitled to take interest in this matter.

On the merits of the remuneration of the CEO in particular, I agree with comments made by the Prime Minister and many others that it is excessive, and I think any fair assessment of the facts, looking internationally and in Australia, demonstrates that it is excessive. Many people in Australia in this debate have focused on the salaries received by comparable post organisations around the world, meaning senators would have heard that Canada Post pays their chief executive about half a million dollars Australian, the US Postal Service a little bit more than half a million dollars Australian, the French postal service A$634,000 and the privatised UK Royal Mail pays its chief executive A$2½ million, which are all substantially less than Australia Post pays its chief executive, even though these organisations are comparable in size, scale and complexity. But actually I am very interested in comparing it to the private sector alternatives, because some of the arguments made in the media by people advocating on behalf of Australia Post in recent weeks have concentrated on the fact that the CEO of Australia Post could command a very good salary in the private sector. I do not doubt that for a moment, but it is instructive to look at how much organisations of similar complexity and size which are much more profitable than Australia Post pay their CEOs.

The three comparisons I have particularly in mind are three of the major banks: the ANZ, the National Australia Bank and Westpac. Each of these organisations paid a similar amount of remuneration to their CEOs in the most recent financial year, ranging from just a little bit over $5 million at ANZ to just a little bit less than $7 million at Westpac, and so they are in the same ballpark as the CEO of Australia Post yet these organisations have revenue many times higher than that of Australia Post, have more employees than Australia Post and certainly are far more profitable than Australia Post. In the case of ANZ its revenue is $21 billion; in the case of NAB its revenue is $20 billion; in the case of Westpac it is $22 billion, compared to $6.6 billion for Australia Post, and these organisations all posted very healthy multibillion-dollar profits that were returned to their shareholders, in contrast to the very slim profits provided by Australia Post. I appreciate that Australia Post is operating in a difficult and changing commercial environment and I would not begrudge in any way a very generous remuneration package for the CEO of Australia Post. But I think the $5.6 million that the Australia Post board has decided was appropriate to pay the CEO is the kind of decision a board would make only if they knew that it would not be something that would be publicly scrutinised. I do not think any board member in their right mind would think it would be appropriate to pay a wage like that, if they knew it was going to be subject to public scrutiny.

Listed companies in Australia are legally required to reveal the remuneration packages of their senior executives and I do not think we should expect any less a standard from a government business enterprise. In fact, I think we should expect a higher standard, given the fact that taxpayers' money is involved. But listed companies, through the Corporations Act, are also subject to a vote by their shareholders, and if a remuneration package of the senior management is voted down twice at a listed company there is an automatic spill of the entire board of the organisation. I am not proposing that the federal government spill the board of Australia Post—certainly not now or any time soon—but I am asking the board of the Australia Post to take their obligations very seriously and disclose relevant information at the upcoming Senate estimates. Unfortunately, I will not be there as I am moving to the Finance and Public Administration Committee, but I have every confidence in my colleagues in the Senate to do so.