Red card for postal boss

Red card for postal boss

Tom McIlroy – The Australian Financial Review – Friday 23 October 2020

Australia Post boss Christine Holgate is resisting pressure to quit over revelations she purchased luxury watches for senior executives who secured a controversial banking deal, instead temporarily standing aside during an investigation.

Prime Minister Scott Morrison ordered the independent review after revelations $12,000 worth of Cartier watches were purchased for staff behind a deal with Commonwealth Bank, Westpac and the NAB to improve services at Australia Post outlets, saying he was appalled and shocked at the “disgraceful” spending.

“We are the shareholders of Australia Post on behalf of the Australian people … she has been instructed to stand aside, if she doesn’t wish to do that, she can go!” Mr Morrison said.

Some federal government MPs said privately Ms Holgate should quit, with Victorian Liberal senator James Paterson calling publicly for her immediate resignation.

Run by the federal Finance and Communications departments, supported by an external law firm, the review will also consider governance and the actions of the board, which includes veteran Liberals Bruce McIver, Tony Nutt and Michael Ronaldson.

Mr Morrison, who worked as treasurer to clean up corporate governance, is equally concerned at the culture of the board which allowed the spending to take place. Although the make up of the board has changed in the past two years, he is eager to ensure that cultural problems don’t persist under the current board.

It is understood Ms Holgate’s assertion to a Senate estimates committee that she had not misspent taxpayers’ money was considered by the government to represent a serious lapse of judgement.

Ms Holgate told the hearing the four watches were given to executives Gary Starr, Deanne Keetelaar, Anna Bennett and Greg Sutherland after the [email protected] deal was finalised, recognition of their work.

“There were a small number of senior people who put in an inordinate amount of work and they did receive an award from the chair, myself, and on behalf of the board,” she said. “We are a commercial organisation. It was a recommendation from our chair that these people get rewarded.”

She said the October 2018 purchase was made on the recommendation of then chair John Stanhope and denied it involved taxpayer funds. Answering questions from Victorian Labor senator Kimberly Kitching, Ms Holgate said the spending was appropriate for a commercial business.

Since her appointment by Malcolm Turnbull in 2017, the former Blackmores chief has battled criticism and a series of controversies, upsetting Labor and keys unions, while overhauling her senior executive ranks.

Former Victorian Labor minister Philip Dalidakis quit Australia Post in February, one of a series of departures which included executives Amanda Murray-Johnson, Janelle Hopkins and Paul Urquhart.

One former colleague told The Australian Financial Review Ms Holgate had alienated staff and forced out critics. “She’s a narcissist,” they said.

Communications Union national secretary Greg Rayner said gifts for highly paid executives were outrageous.

“The government needs to intervene further than just wiping out the CEO,” he said. “Australia Post needs a whole reshuffle to get their leadership team right. The Board must step aside too.”

The Community and Public Sector Union said management and the board were “out of touch”.

Mr Stanhope told The Australian Financial Review he didn’t remember the purchases. The Port of Melbourne chairman said he would co-operate with an investigation but hadn’t followed Thursday’s controversy.

“Quite frankly, I can’t remember authorising it back in October ’18,” he said.

“Australia Post is self-funding, but having said that they’re a government-business enterprise that is reportable to a minister and therefore the Parliament, so while it’s not taxpayer funded, it still has an accountability to the government.”

Finance Minister Mathias Cormann and Communications Minister Paul Fletcher confirmed Ms Holgate would stand aside during the four-week investigation, a request made through chairman Lucio Di Bartolomeo.

Ms Holgate and chief financial officer Rodney Boys couldn’t say if corporate credit cards had been used to buy the watches or if fringe benefits tax had been declared.

Mr Starr, Australia Post’s executive general manager, said he wasn’t wearing his watch while giving evidence to the committee on Thursday. He said he had not given the watch to anyone else, including his wife.

Ms Holgate has been forced to defend her tenure at Australia Post amid a series of controversies, including threats to call in the police over delays to the delivery of Pauline Hanson-branded stubby holders destined for residents of Melbourne’s locked-down public housing towers in September.

Service obligations were weakened due to COVID-19, allowing some priority letter delivery services to be suspended and interstate deliveries to be slowed. The corporation has seen delays and backlogs in parcel and letter delivery.

She received $1.6 million in pay in 2019-20, taking a voluntary 20 per cent cut due to COVID-19. Bonuses for Australia Post executives were vetoed by the board.

On joining Australia Post from the vitamins manufacturer, Ms Holgate’s pay packet was significantly lower than her predecessor, Ahmed Fahour, whose $10.79 million salary and bonus sparked anger in 2017.

Australia Post delivered a $53.6 million profit before tax in 2019-20, driven by an 18 per cent increase in parcel deliveries. Falling letter volumes delivered a $220 million hit to the bottom line, despite increases in postage rates.

After the 2018 deal, Ms Holgate accused ANZ boss Shayne Elliott of misleading the public over a fee dispute. ANZ refused the banking portal join over concerns it would be subsidising rivals.

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