In recent weeks it has been brought to the attention of the Australian people what the CEO of Australia Post is being paid. It was a complete outrage. It was raised last year but nothing much happened about it. It was raised again this year. In 2009 the board of Australia Post reported in the annual report that the managing director and some key senior executives were all employed under ongoing employment contracts, which could be terminated with 60 to 90 days notice. In the case of the managing director, he would be entitled on termination of his contract to 60 days pay at 1.5 times his base salary. We can only guess what it is now. Apparently, they are reluctant to put in full reports. You ask the question: why? Since then the board has progressively provided less and less remuneration information.

Seven years ago, the Australia Post annual report named the highest paid individuals and reported their individual remuneration. In 2016 we know only that 20 people shared a pot of $18,702,653. We had to rely on the media to find out that the managing director was paid $5.6 million. He did not need it, because he gave over $2 million to charity. The payment of $5.6 million to the managing director of a government business enterprise is excessive. At some level, the board must know that payments to senior staff reduces the dividend payable to government, which was just $20 million in the period 2015-16. The Prime Minister’s solution to this mess is novel. He suggests the Australia Post’s managing director give back any amount his conscience advises.

The board members of Australia Post are weak and lost. The Prime Minister’s idea of a voluntary return of salary already paid to the managing director of Australia Post and other key executives has little chance of success. It is self-evident to every Australian, except the board members of Australia Post, that $5.6 million is excessive remuneration for the managing director of Australia Post. The Australia Post board has proven itself incapable of bringing remuneration into line with community expectations. The Prime Minister’s solution is unworkable. I have no choice but to try and fix the problem with a private member’s bill, if I get the full support of my fellow senators, who must also be appalled with this disgusting remuneration package.

The board’s failure to manage remuneration is just a symptom of a wider failure at Australia Post. The postal network is an essential service for the elderly, the homeless, others without a fixed postal address and people in rural and remote areas of Australia. Australia Post is required by law to provide a postal service even where it is unprofitable to do so. This is its community obligation. It is rural and remote post offices, which are often owned and managed by one person, which provide the essential postal service. Shockingly, these small businesses have found themselves bullied by Australia Post, locked into unfair financial agreements and unable to get paid for work done under contract. The board of Australia Post has failed to implement the recommendations made by the 2014 Senate committee report titled Performance, importance and role of Australia Post in Australian communities and its operations in relation to licensed post offices.There is no doubt that the current board of Australia Post needs to be replaced. I would expect the new board members to implement the Senate’s recommendations.

The current business model which operates at Australia Post needs to change. It is unAustralian to shift the responsibility for meeting non-profitable community obligations to franchisees in rural and remote Australia and then not pay them for all the work they do. It was never intended that the board of Australia Post, with its overpaid managing director, would misuse the market power given to it by the parliament. The unconscionable contracts with Australia Post franchisees must be changed so that it is not possible for someone to work for half an hour and get a payment of 34c. The government’s usual response of writing to the board and calling the chairman to the Senate to answer questions is a demonstrated waste of time. The Labor Party attacked me for supporting some of the government’s measures in the omnibus bill, saying that it is hurting pensioners and the needy. Shutting down the Australia Post board and their remuneration would clearly not hurt pensioners, so I expect their support. The Minister for Finance and the Minister for Communications are the two shareholder ministers in Australia Post. It is time for a ‘please explain’ to Australia.

Source: Chamber Senate on 15/02/2017 Item MATTERS OF PUBLIC IMPORTANCE – Executive Remuneration: Australia Post Speaker :Hanson, Sen Pauline