Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Today I rise to continue my remarks on the Communications Legislation Amendment (Executive Remuneration) Bill 2017. The purpose of this bill is to put downward pressure on excessive salaries paid at Australia Post and the National Broadband Network, NBN. I have always intended that this bill would start the process to reduce excessive salaries paid by the taxpayer. In 2016, eight people at Australia Post were paid a total of nearly $14 million, including the managing director, who was paid $5.6 million. In that same year, Australia Post returned just $20 million as a dividend to government and had undisclosed plans to sell the iconic GPOs in capital cities. These assets were previously agreed to be held in trust for the people of Australia. When the Sydney GPO was sold to Singaporean billionaires we were told the money would be invested in people and services at Australia Post. My view is that these assets should not have been sold. The Labor government appointed Mr Fahour as the Managing Director of Australia Post and, in the six years that followed, taxpayers paid Mr Fahour approximately $24 million, approved and supported by the board of Australia Post. If the board of Australia Post were not paying excessive salaries to key management positions, it would not have been necessary to sell off these national treasures to invest in people and services.

So how do Australians find themselves watching iconic public assets being sold to enrich a few private individuals at Australia Post? Anyone can see the board of Australia Post is incompetent and the government weak. The Managing Director of Australia Post was paid $5.6 million in 2016, which is excessive, to say the least, when compared to equivalent positions such as Canada Post, at A$497,000; US mail, A$543,616; and the Royal Mail in the UK, A$2.5 million. Let's put this in perspective. The board of Australia Post paid Mr Fahour more than 10 times the salary of the Prime Minister of Australia. This does not pass the pub test. After I raised concerns about Mr Fahour's pay packet on the floor of this place, he handed in his resignation the following week, because his pay had never been challenged before.

So how did the board of Australia Post arrive at $5.6 million? The mischief is that the board did not compare the role of the managing director with similar roles in Canada Post, US mail or the Royal Mail in the UK. Instead, the board instructed a consultant to look at roles in the private sector, which were entirely different to those guaranteed by government and founded on a monopoly enshrined in law.

Australia Post is owned by the government, and two shareholder ministers are tasked with acting like ordinary shareholders of any company, but they were asleep at the wheel when Australia Post went off the road. It's a tragedy and a disgrace that this government cannot manage the board of Australia Post in a way that the people of Australia expect. This government needs to learn the art of making its budget balance, and it can start with reducing the salaries of many hundreds of executives who are excessively paid with taxpayer money.

Australians are sick of seeing their hard-earned taxpayer dollars going to overpaid executives while government assets are being sold off, and I include the sale by Australia Post of the iconic GPOs in each capital city. I hear that the sales of the Brisbane and Melbourne GPOs are being negotiated, but I don't know because the government, as shareholder in Australia, keeps us all in the dark. I am sick and tired of being told about the sale of public assets after the deal is done. Australians own these assets and they want a say on whether they are sold or not. I am not going to keep fighting for the rights of Australians to be told in advance what is being done with their assets.

This week the Commonwealth Bank announced it would cut the remuneration package of its chief executive officer by 35 per cent. The board of the bank took the decision in response to shareholder concerns and wider community outrage. The lesson here is that remuneration can go down.

The government, as a matter of urgency, should be conducting a review of the salaries paid to our university vice-chancellors. This group of some 38 men and women are excessively paid. They are on average the highest-paid vice-chancellors in the world, but their universities are not the highest-performing universities in the world. Sydney university is ranked 60th in the world, but the vice-chancellor of Sydney university receives more than double the pay of the No. 1 university in the world, which is Oxford university. The Oxford university vice-chancellor is paid $577,000 a year. In Australia, the average vice-chancellor receives $890,000 a year, and all bar two are paid more than the vice-chancellor of Oxford university. This is a disgrace given many of our universities rank outside the top 300 in the world, and some are not even on the list that ends at 981. Universities cannot expect more funding from taxpayers when they overpay their vice-chancellors. That sets unrealistic relativities throughout the university.

Some senators may recall the public outrage when they learned $5.6 million had been paid to the managing director of Australia Post by the board of Australia Post. Equally outrageous is the payment of $3.6 million to the chief executive officer of the poorly performing NBN. My pressure on government forced them to issue a press release with the heading 'Remuneration Tribunal to oversee Australia Post managing director salary and conditions'. The key word here is 'oversee', because the government wants you to believe that the Remuneration Tribunal exercises some oversight over the determination of the salary for the new managing director of Australia Post. This was not the case and it could never have been the case.

Australians know that, when you say one thing but do something else, you break trust. But still the government was willing to do that and so implemented an underhanded strategy. The government pretended it was outraged at Mr Fahour's pay packet of $5.6 million. Labor also pretended to be outraged, but both parties had opportunities to deal with this excessive remuneration in past years and chose not to do anything. The government press release on 23 February 2017 was a quick and cheap way of giving the appearance of responding to the concerns of Australians, because the press release said the Remuneration Tribunal would determine the pay packet of future managing directors at Australia Post. We know the press release was misleading, because section 86 of the Australian Postal Commission Act 1989 says:

The Managing Director holds office on such terms and conditions (including terms and conditions relating to remuneration and allowances) in relation to matters not provided for by this Act as are determined by the Board.

Nevertheless, the day after the press release, the government purported to give the role to the Remuneration Tribunal, knowing full well that a letter signed by a minister cannot override an act of the parliament. The letter, a legal instrument, declared the board of the Australian Postal Commission would continue to be the employing body, and it assigned the position of managing director at Australia Post a classification E, with a minimum salary of over $469,340, with no upper limit. Let me repeat that: no upper limit. This is no accident. Classifications A, B, C and D all have upper limits. So they have given it completely back to the hands of the board of Australia Post to pay whatever they want to their CEO or managing director.

The board of Australia Post has now offered the new managing director of Australia Post a target reward of $2,337,500 and a stretch incentive of a further $412,500, making the package of $2,750,000 a year. This is half of the $5.6 million paid to Mr Fahour, but it does not reset relativities in pay at Australia Post, where seven key upper-management positions received $8,167,942 in 2016.

Despite all the government's pretence about the Remuneration Tribunal being the body to oversee and determine the quantum of the pay for the managing director of Australia Post, there is nothing to stop the pay rising back to $5.6 million or beyond in the near future. The underhanded way in which the government has gone about this whole matter simply reinforces the need for the Communications Legislation Amendment (Executive Remuneration) Bill 2017 to pass. In my bill, the right of the board of Australia Post to set remuneration will be taken out of the Australian Postal Corporation Act, and that right will by given to the Remuneration Tribunal.

The second part of my bill relates to the position of the CEO at NBN. NBN is on the government books as an asset, not a liability. It has been valued at close to $30 billion, which no-one would pay for the performance it delivers to the poor bunnies of Australia, who have been forced to take it, pay more and receive less than before. I am a member of a Senate inquiry dealing with NBN. It is heartbreaking to listen to the ordinary Australians who have made submissions to the committee. It is a disaster. Yet, despite NBN not meeting its own targets, the chief executive officer of NBN is being paid $3.6 million.

The government will not consider doing anything to reset the remuneration package at NBN because all the focus has been on Australia Post. The government is like a consumer who pays twice what they need to for designer label goods because they have no confidence in their ability to judge quality. The government needs to learn that there is not a direct correlation between how much you pay and what you get. I am determined to see excessive salaries and bonuses paid by hardworking Australian taxpayers reined in, but the government, the opposition and some crossbenchers want to fight that aim at every turn.

Australia Post and NBN are the worst cases of excess. If the Senate will not deal with the worst cases of excess, then there is no hope that a long line of other excessively paid positions will be reduced. Boards of government businesses have proven poor at negotiating remuneration packages. Just look at Australia Post and NBN. These boards do not have the skills nor the ability to stay at arm's length from what one paper describes as rolled-gold negotiators. We need the Remuneration tribunal to set the terms and conditions for all key positions in government-owned businesses. I ask senators to support this bill.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I agree with some of what Senator Hanson has just said. She makes, in my view, a very good point: that the leader of our nation, the Prime Minister, from whichever political party, is paid a fraction of what many other people are paid in this community. I always smile at the fact that the Treasurer of the Commonwealth of Australia, who is in charge of financial matters in Australia, receives, I suspect—I am not quite sure what it is—around $350,000 to $400,000. But he deals with the executive heads of the major banks, who receive $17 million, $5 million, $3 million plus. When the people who have charge of monetary policy in Australia are paid a pittance compared to what the people they deal with in this country have, it just seems to be a very skewed way of remunerating people. I made the point even when Mr Wayne Swan was the Treasurer—and, heaven forbid, if you were paying him by value, you wouldn't have paid him a cent. But he was there, he was in charge of the monetary system, and it was ridiculous that even Mr Swan was paid only a pittance compared to those he was dealing with.

However, I digress a little bit. I simply wanted to say I'm glad that Senator Hanson has raised these issues. They are issues that we've tried to raise many a time. Senator Hanson, you left out of your contribution something I thought you might've raised. It's something that, for years, we tried to get a handle on, and that is: what is paid to the totally taxpayer funded ABC? I remember we had Senate committee after Senate committee, we had advice from the clerks, and we used to say to the ABC, 'What are your presenters paid?' They refused to tell us. We eventually got to a compromise where we learned that the three major presenters from the ABC got within this range, which meant that some of these people, who, in my view, are nothing more than spruikers for the ALP and the Greens political party, were getting $5 million, $6 million, $7 million in salary for a couple of hours work a week. So maybe there needs to be a bit more transparency in what the taxpayers pay to some senior ABC presenters, on-air people, who I say work a few hours a week because they only do one show a week. As a parliamentarian, I know they do a bit of preparation work. But it's interesting to think about why these presenters, a couple of whom we know have very strong Labor Party connections, are paid these enormous salaries by the taxpayer to propagate what seems to me to be Labor Party propaganda. Others will disagree with that. That's a personal view on these particular presenters. I won't mention them by name. But I think it's time for the ABC, which is totally taxpayer funded, to be brought into this scrutiny, as we politicians always are. If any of my colleagues in this chamber make an indiscretion in their financial matters, it's always the media that are first in to query it and to make it a front-page story. And yet, with the ABC, we have no idea what individuals are paid, and I think that, as a national broadcaster, paid for by the taxpayers' money, that's something parliamentarians should have more oversight of.

But I've digressed from this particular bill. While I listened intently to Senator Hanson's contribution, insofar as Australia Post is concerned, this proposed legislation is superfluous. The intent of the bill was to limit the remuneration of the managing director of Australia Post—I'll come to NBN later. But the government has acted to ensure the remuneration of the managing director of Australia Post now aligns with community expectations. For that reason I suggest to Senator Hanson, through you, Madam Acting Deputy President Reynolds, that the bill's not required, in order to achieve the outcome that she and her party obviously seek to achieve. You don't need to do that, because the government has already acted. In February this year, Senator Cash, the Minister Assisting the Prime Minister for the Public Service, declared that Australia Post is the employing body for the principal executive officer, the managing director, of Australia Post. This had the effect of bringing the managing director's remuneration under the oversight of the Remuneration Tribunal, and that meant that the board of Australia Post had to set the terms and conditions for the managing director consistent with the requirements of the Remuneration Tribunal. The remuneration for the incoming managing director, as all senators will know, was set under these new arrangements and is half of the remuneration of the outgoing managing director. The Remuneration Tribunal already sets the remuneration for Australia Post's chair and deputy chair and non-executive directors. The government took this decisive action to address community concerns regarding the remuneration paid to the former managing director.

These matters have been raised in any number of Senate committees over the many years that I have been here, but, as Senator Hanson rightly said, it was always difficult for Senate estimates committees to get any real information as to what the former managing director was actually paid. When it was revealed that he was on a total of $5.6 million in 2015-16, everybody appreciated that that was well out of step with community expectations—at a time, I might say, when Australia Post was losing money and the services it was providing to those who needed its services was limited.

I remember trying to do something about the mail centre in Rockhampton, to help out a couple of little people who couldn't get a night's sleep because of all this activity happening next door to their place in a residential area of Rockhampton. We interacted with Australia Post for a period of time. I must say, they treated us courteously, and they responded to everything. But we never achieved much because to remove the mail centre from a residential area and put it on an industrial estate would've cost too much money—though I suspect, in retrospect, it probably wouldn't have cost more than half the managing director's salary. So certainly what was paid to the previous managing director was out of step with the community's expectations.

The Remuneration Tribunal has looked at this matter and they have set a total remuneration reference rate for the office of managing director of $1.4 million, and they have agreed to a performance pay incentive arrangement that provides for access to up to 100 per cent of the total remuneration—that is, an additional $1.4 million. So the board can, if it so wishes, pay a total of $2.75 million, if my arithmetic is correct. That is a matter for the board. But it is overseen by the Remuneration Tribunal, which accepts that Australia Post is a big business with a lot of outlets right around Australia and that it has a lot of dealings with franchisees and a lot international dealings and so it does require the very best person to take on that role.

I know that I—and, I am sure, all other senators—get lots of complaints from licensed post office operators about the treatment they receive from Australia Post. I am currently trying to help the LPO operator in Normanton, way up in the Gulf of Carpentaria, in a dispute with Australia Post as to where the post office in this fairly remote area delivers the money it collects from all those grey nomads travelling up to Karumba near Normanton, and I am hopeful that that matter, which has gone to mediation, will be resolved so that the genuine issues which the operator had can be addressed at the very earliest time.

Whilst I understand what Senator Hanson is getting at, can I again repeat that the government has already addressed that. The Remuneration Tribunal does oversee what the board can pay the managing director of Australia Post. I know that at the time the managing director changed there were changes to the board of Australia Post. I don't know all of the board, but I do know one or two of them. Contrary to Senator Hanson's description of none of them being rolled-gold negotiators, one of the board members that I do happen to know you can class as a rolled-gold negotiator. So the board has changed. I think there is a new appreciation of what needs to be done. It's not an easy business, Australia Post, I concede. It requires good people, and you have to pay well to get good people. But I'm confident now that the board, with the oversight of the Remuneration Tribunal, has got the right balance.

In relation to NBN, you can't but have sympathy with some of the issues Senator Hanson raised today. The reason that the CEO of NBN is not subject to the Remuneration Tribunal is that the shareholder ministers of the NBN actually wrote to the Remuneration Tribunal and told them that they weren't to look at this. Those two ministers, I hasten to add, are not the current ministers. They were, of course, Mr Lindsay Tanner and former senator Stephen Conroy. In a letter dated 24 June 2009, they wrote to the President of the Remuneration Tribunal and said:

Given that the company has been established with the view to taking on private owners within the next few years, we do not propose to have the position of Chief Executive Officer (CEO) of the company designated as a Principal Executive Officer, or to seek a Remuneration Tribunal determination in relation to the role.

I was around when this NBN was set up. There was never any way in the world—and I bet Senator Conroy, I think, a carton of Grange; I was confident in making the bet quite expensive because I knew I would never have to pay up—that in my lifetime or in Senator Conroy's lifetime would the NBN in the Conroy model ever be sold to private enterprise, because it would be a loss-making company and no profit-making private enterprise would ever consider buying something that was losing so much money. The Conroy model was such that it was impossible for NBN ever to make a profit and, therefore, ever to be in the hands of private owners.

Since the coalition has taken over, NBN will still struggle, I suspect, to make a profit, but it has a chance. I guess at some time in the long-distant future it may become a profitable company and it may then be more appropriate that a private entity run a business rather than the government trying to run a business. The days of governments and public servants trying to run a business passed in the '50s and in Russia and in Eastern Europe in the 1980s, when everyone realised—you didn't have to be an economic genius to realise—that governments and public servants shouldn't be running private businesses. But that is why that wasn't done.

I suspect another reason the Labor Party didn't want the Remuneration Tribunal anywhere near this organisation was that the early stages of the NBN under Senator Conroy turned out to be a repository for failed Labor apparatchiks to get a well-paying job. There was a former Queensland Labor member of parliament by the name of Kaiser who was thrown out of parliament for indiscretions. Would you believe it? He ended up working for NBN as a government liaison person at twice the money he would have received as a politician in the Queensland parliament. I always used to wonder why NBN, which was at that time a government-owned organisation totally under the control of Senator Conroy, needed a government liaison person. They were the government! It was the government liaising with themselves. I guess that, with some of the early payments made by NBN to middle-order officials, the last thing Senator Conroy or those in charge would have wanted was for the Remuneration Tribunal to be anywhere near it.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

Mike Kaiser.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Mike Kaiser—you're quite right, Senator Smith. It is the government's view, however, that, for the moment, it remains appropriate that the NBN retain responsibility, or the board retains responsibility, for recruiting key management personnel and setting the remuneration. The NBN board itself is now made up of leaders with specific telecommunications, industry, government and wider commercial expertise. The government is, at this stage, prepared to leave the NBN board to determine the appropriate remuneration required to attract the talent needed to manage the NBN rollout. When compared to Australian businesses of similar size and to executive salaries in the communications sector—and I particularly mention the communication sector—NBN's remuneration is comparable with executive salaries in public companies.

But, again, I know that under the guidance of Senator Fifield and the government, generally, the NBN board will be aware that they should pay industry standards. If they go beyond it, as happened in the case years ago with the Australia Post board, then the government would be watching that very closely. It is the government's and the public's view that what was happening in Australia Post didn't pass the community standard that is expected. The government is very conscious of that. They changed the laws in relation to Australia Post. Whilst at the moment the government is happy to leave the qualified board at NBN to get industry-standard people there at the industry-standard price, it will be keeping a very close watching eye on that.

So the government won't be supporting the bill, because (a) part of it has already been actioned by the Turnbull government, and (b) we think that with NBN at the moment and in that particular sector of the economy, it's one that's best left to a qualified board, which NBN now has.

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

The Communications Legislation Amendment (Executive Remuneration) Bill 2017 would formally give the Remuneration Tribunal the ability to set the remunerations of the CEOs of Australia Post and NBN Co. This is in the wake of revelations that the remuneration of Australia Post's previous chief executive officer was $5.6 million last year. This has quite rightly been widely criticised and was not in line with community expectations for an entity that is ultimately supported by taxpayers. Australia Post did not report the CEO's salary and, rightly, was roundly criticised for this. Indeed, it was only after a Senate committee denied their request to keep the figure private was it actually finally revealed. The CEO affected has since stood down from his position at Australia Post.

The government then moved to designate the CEO of Australia Post as a principal executive officer and Australia Post as an employing body under the Remuneration Tribunal in response to the outcry over the former CEO's salary. The government has stated that this has had the effect of ensuring the Remuneration Tribunal has appropriate oversight of the CEO's pay. We understand that the tribunal did oversee the setting of the remuneration package for the incoming chief executive officer, who is on a considerably lower salary package.

Labor and the government undertook significant reforms to the Commonwealth's financial management arrangements. This has established a framework necessary for a modern public sector. These reforms were based on a number of key principles: that the government should operate as a coherent whole; that a common set of duty should apply to all public resources handled by Commonwealth entities; and that these should be managed prudently and efficiently. The performance of the public sector is more than financial, and engaging with risk is a necessary step in improving performance. The PGPA Act provided more flexible arrangements for entities and relied on the management of a number of subordinate rules and regulations where officials were expected to be held to a high standard of accountability. And yet we have recently seen, through the Australia Post example and other agencies, decisions not to disclose the remuneration of their senior executives.

As we have learnt now, the Abbott and Turnbull governments did not ensure that Commonwealth entities had sufficient checks and balances on executive remuneration. This led to Australia Post's not revealing the chief executive officer's $5.6 million remuneration package, which was clearly out of step with community expectations. The failure by Australia Post management and board to reveal detailed remuneration information as part of its annual report was enabled by changes to reporting rules which had been made by the Minister for Finance, Senator Cormann. This demonstrates very much the gaps in the Commonwealth's financial reporting framework that have opened up under this government, and this bill does not actually fix that problem.

We on this side are of the view that greater transparency and scrutiny through Senate estimates will assist to ensure boards and management are held to account for the setting of remuneration, and that it is within the community's expectations, as was shown through the Australia Post example. The Auditor-General considered that there would be benefit in making the aggregate level of transparency for key management remuneration in the public sector consistent with that required for listed entities, and the government has also requested a number of Commonwealth entities revert to the previous regime of remuneration reporting. We welcome the release of those reports under the Minister for Finance's request. However, we believe the government should act to ensure that these are formally required of all Commonwealth entities, and not just at the request of the minister. The government is yet to act on this.

When everyone else is tightening their belt and experiencing record low wage growth, the government was happy for CEOs' salaries to be hidden, as in Australia Post's example. But in comparison to the poor choice by Australia Post, NBN Co chose to disclose much more detailed information. Labor is keen to consider how to formalise the requirements for executive remuneration to enhance transparency, thereby enhancing trust from the community and hold boards and secretaries to account for their remuneration arrangements.

Brian Burston (NSW, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I rise to speak on Senator Hanson's bill, the Communications Legislation Amendment (Executive Remuneration) Bill. The purpose of this bill is to amend the Australian Postal Corporation Act 1989 and the National Broadband Network Companies Act 2011 to remove the ability of the respective boards to set remuneration and to give that authority to Remuneration Tribunal by amending the Remuneration Tribunal Act 1973.

It is my understanding that the Remuneration Tribunal already sets remuneration for most of the other government business enterprises, such as the Australian Rail Track Corporation, which is responsible for some 10,000km of interstate rail; the Australian Submarine Corporation, which is responsible for naval shipbuilding and the proposed spend of $50 billion on new submarines; Defence Housing Australia; and the Moorebank Intermodal Company, which is responsible for the major infrastructure hubs in Sydney. If the Remuneration Tribunal can handle the remuneration of the Prime Minister, members of parliament, the judiciary and others managing government businesses, then it can handle the remuneration for the most senior officers at Australia Post and NBN.

While I'm on the subject of the Remuneration Tribunal, I would like to take the opportunity to remind the Senate that in March this year only senators Bernardi, Leyonhjelm and Lambie and the One Nation senators voted to forgo pay rises set by the government until the federal government delivered a budget surplus. It seems there is not a more unifying issue in this place for senators than their own hip pocket—maybe a parliamentary dual citizenship audit is a close second, but I digress.

No-one in this place could reasonably argue that the annual remuneration of almost $6 million for the previous managing director of Australia Post, Mr Ahmed Fahour, was out of community step and expectations, especially when you compare it to the United States, where the postal service employs over 600,000 staff and delivers more than 660 million pieces of mail a day, yet its CEO gets a package worth A$1.2 million.

The flow-on effect to taxpayers of such an excessive remuneration is significant. It makes payments of between $1.3 million and $1.8 million to a number of other executives seem reasonable. That further reduces the dividend back to the taxpayer. This in turn reduces the ability of Australia Post to absorb some of the increasing costs of delivering the mail, making posting letters and other mail more expensive. It is also a slap in the face to the real workers at Australia Post: the staff, the contractors and the owners of licensed and franchised post offices, who deliver such a valuable service to our community.

On 24 February 2017, after significant pressure from One Nation and an outcry from the Australian community, the government announced that it would bring the position of Managing Director of Australia Post within the regime administered by the Remuneration Tribunal, but it said nothing about the CEO of NBN. I note that the new Managing Director of Australia Post, Ms Christine Holgate, who starts her new role in October, has had her salary set in accordance with the parameters set by the Commonwealth Remuneration Tribunal and, as such, will receive a base salary of $1.379 million a year, with the potential to earn 100 per cent of that as a bonus. While I personally think that is still excessive compared to the remuneration of the US Postal Service CEO, it is still a step in the right direction.

This bill also brings the CEO of NBN Co within the framework of the Remuneration Tribunal, and I will speak on the board of the NBN Co and its payment of $3.6 million to the chief executive officer at a later date. I seek leave to continue my remarks later.

Leave granted; debate adjourned.