While it had been lost among so many other meaningful acts of gross abhorrence and incompetence until this weeks’ Senate Committee Hearing, Scott Morrison’s treatment of former Australia Post chief, Christine Holgate, represents a low watermark for public sector governance in Australia.
Holgate was absolutely right to tell the Senate Committee that Morrison was to blame for her sacking.
In November last year, Holgate purportedly resigned as chief executive of Australia Post after it was revealed that she authorised the purchase of four Cartier watches (costing $5,000 each) to be given to executives who executed a lucrative deal with three large banks.
Never one to miss a political opportunity — whatever the costs — Scott Morrison stood up under parliamentary privilege and called the decision ‘disgraceful’, contemptuously claiming that he was “so appalled and shocked…by that behaviour, as any shareholder would in a company raise their outrage if they had seen that conduct, by a chief executive, the management or the board.”
Within days, Holgate was gone from Australia Post, with the specifics of whether it was a termination or resignation not been clarified by the committee. However, Australia Post’s head of people and culture, Sue Davies — who was with Holgate at the time — confirmed that she did not resign.
But make no mistake, while Scott Morrison may not have pulled the trigger, he certainly organised the hit.
There are three very clear reasons why Morrison was wrong.
The nature of the bonuses
Rather than being outrageous conduct, the watches were actually smart business practice. For a start, Holgate herself didn’t get any benefit (unlike the controversy at ASIC that soon followed, which involved former chair standing aside after receiving $118,000 of tax advice).
Moreover, giving a gift (be it a timepiece or an experience) is likely to have a more substantial impact in the recipient than giving them a cash bonus. While expensive watches aren’t my taste, the recipients would be grateful to AusPost every time they checked the time. Contrarily, cash likely goes into a bank account to pay off a mortgage, never to be seen of again.
As strange as it sounds, Holgate’s decision was probably good value for money for the business and for shareholders (Australian taxpayers).
The cost of the bonuses
While $20,000 isn’t insignificant, it is absolutely immaterial in the context of the organisation. Former Australia Post chair, Ahmed Fahour, was paid $10.6 million in salary, bonuses and benefits in his final year with the organisation.
Scott Morrison, who was Federal Treasurer at the time, didn’t say a word.
Apparently paying a bloke $10 million is OK, but when a female chief executive pays bonuses one-two hundredth of that to four outstanding performers (rather than herself), suddenly, that is ‘disgraceful’ and ‘appalling’ and worth of the executive immediately being stood down.
The rest of the public service
In February, it was revealed that the NBN — another organisation effectively owned by taxpayers and which has been a shambolic mess for a decade — paid bonuses of almost $80 million to 6,000 employees. Already well-paid executives were also showered with $4.3 million in cash bonuses, which had been deferred since 2018.
If the Morrison was so concerned about Australia Post ‘wasting’ $20,000 on four watches, he should have been downright incandescent about the NBN. Oh, and the NBN boss, Stephen Rue, was paid more than $3 million last year, around double what the thrifty Holgate received.
Scott Morrison didn’t say a word about the millions of dollars wasted by the NBN, with Communications Minister, Paul Fletcher, instead claiming it was “a decision for the NBN board”.
Funnily enough, despite being virtually solely responsible for Holgate’s sacking, suddenly Morrison seemed to be changing tack, now claiming the dispute was “a matter now that’s substantively between Ms Holgate and Australia Post”.
Australia Post chair, Lucio Di Bartolomeo, who was forced to act as Scott Morrison’s very own Lee Harvey Oswald (and all but conceded yesterday that the decision was wrong), cannot tenably continue in his role.
And if it’s any consolation to Holgate, it’s unlikely the inept Morrison will be around for too much longer either.
Adam Schwab is a company director and author of Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed.