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Performance pay for $3 billion blunder.

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Media Release


TELEPHONE: (02) 6277 4803 ! FACSIMILE: (02) 6277 8496

14 March 2002


The decision of the government to pay in $38,100 in performance bonuses to the executives responsible for the currency swaps program in the two years in which it lost $3 billion shows its complacency about this spectacularly unsuccessful gamble.

As the attached table makes clear, Australian Office of Financial Management chief executive Michael Allen and his deputy, Peter McCray, were each paid substantial bonuses in years when the program made substantial losses.

In 1999-2000, when the program lost $1.1 billion, Mr Allen was paid a bonus of $9,000 and Mr McCray $10,471, and in 2000-01, when they lost $1.9 billion, Mr Allen was paid $11,016 and Mr McCray $7,612.

It is no consolation that no bonuses were paid in the year with the biggest loss of all, 1997-98, when $2 billion was lost: the performance pay system did not operate in Treasury at all in that year.

The fact that the Treasurer didn’t know the bonuses were paid, and had never even taken the trouble to find out, highlights his total lack of attention to important management issues within his portfolio.

I challenged him to provide an answer to this question in a parliamentary debate on Tuesday, yet when the issue was raised again in Question Time yesterday he still had no idea.

This arrogant lack of concern for the proper management of taxpayers funds is the hallmark of Peter Costello’s administrative approach.

Further information: Robert Garran (02) 6277 4803, 0419 692 504