FROM SENATOR JAMES PATERSON
9 February 2017
E & OE
My question is for the Minister for Communications, Minister Fifield.
Can the Minister update the Senate on the issue of executive remuneration at Australia Post?
I thank the Senator for his question.
On 7 February, the Senate Standing Committee on Environment and Communications released Australia Post’s answers to questions on notice from the October Estimates.
The released information disclosed that the Managing Director of Australia Post earned a total of $5.6 million in 2015-16, including $4.4 million in short-term employee benefits and $1.2 million in post-employment benefits.
Mr President, the view of the community, the Government, the Prime Minister and myself is that the current level of executive remuneration is out of step with community expectations.
The Government also agrees with the Senate Committee’s unanimous view that there is a public interest to report the executive remuneration offered at GBEs, and that GBEs should be held to a high standard of disclosure.
Mr President, Yesterday I called the Chairman of Australia Post to make these views clear.
Additionally, myself and my joint shareholder Minister, Senator Cormann, yesterday wrote to the Chairman of Australia Post requesting:
that the Board give more rigorous consideration to remuneration packages offered to senior executives,
that the Board should be conscious of community expectations in relation to remuneration,
that the Board take executive remuneration into account when seeking to reduce operational costs and,
that the Board should ensure greater transparency in relation to executive remuneration.
Mr President While the setting of executive remuneration is the responsibly of the Board of Australia Post, the letter makes clear that the Board needs to be able to justify its decisions to the Australian public.
What is the Minister’s view on the issue of transparency in reporting of the remuneration of commonwealth enterprise executives?
Mr President, the Australian community deserves high levels of accountability and transparency from Government Business Enterprises.
And While Australia Post’s reporting of senior executive remuneration is in accordance with the Public Governance, Performance and Accountability (PGPA) Act, it is not in line with the community or government expectations. Australia Post should provide transparency of executive remuneration which goes beyond its obligations under the PGPA Act.
I have asked the Board to follow the practice of other GBEs, which disaggregate reporting of senior executive remuneration in Annual Reports.
Mr President, The PGPA Act should be viewed as the floor, not the ceiling, in the disclosure requirements of a GBE.
What role should community standards play in the setting of executive remuneration by the Boards of government business enterprises?
Mr President, we recognise that according to the PGPA Act, decisions regarding senior executive remuneration are the responsibility of the Australia Post Board.
Shareholder Ministers also recognise that Australia Post operates in a competitive environment.
However, it is the Government’s view that the Board of Australia Post should be conscious of community expectations when determining remuneration for senior executives, and be and prepared to give a public justification to the satisfaction of the Australian community.
Accordingly, I have spoken with the Chair of the Senate Communications Committee, Senator Paterson, who has indicated that the Committee intends to invite the Chair of Australia Post to attend the next estimates hearing on 28 February to inform the Committee of the Board’s response to expressed community and government concerns, and to do so in that public forum.
I have spoken to the Chair of Australia Post today to convey my view that he should do so.
All of us who are employed in the service of the community are rightly accountable to the Australian public.