Labor attacks NBN CEO appointment amid Coalition leadership turmoil
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Labor attacks NBN CEO appointment amid Coalition leadership turmoil

The Turnbull government has been forced to defend the appointment of Stephen Rue as the new chief executive of the National Broadband Network, amid fresh Coalition leadership turmoil in Canberra.

Mr Rue was confirmed on Wednesday as the government's choice to suceeed Bill Morrow as the CEO of NBN, as the massive infrastructure project enters a decisive phase. The appointment was flagged by Fairfax Media earlier this month.

NBN chief financial officer Stephen Rue has been named the new CEO of the network.

NBN chief financial officer Stephen Rue has been named the new CEO of the network.Credit:NBN

But with the next federal election due by May 2019, and with fresh uncertainty over the Coalition's parliamentary leadership, the shadow minister for communications Michelle Rowland and shadow minister for finance Jim Chalmers both condemned the appointment.

"Labor does not consider the appointment of a permanent NBN Co CEO this close to the election to be appropriate, particularly given the dysfunctional state of the Turnbull government," they said in a joint statement.

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"We have made our view clear that the appointment of the CEO should have been an interim one. Labor also made clear we expected to be consulted on any ongoing appointment for this reason. This has not occurred."

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Mr Rue has been NBN's chief financial officer since mid-2014. Before that, he held the same position at News Corp in Australia, where he worked for 17 years. He has also served on the boards of Foxtel, REA Group and Australian Associated Press.

He will take on the politically charged position at a critical juncture for the rollout, with 18 months left until its deadline for completion by 2020.

Communications Minister Mitch Fifield defended the appointment, saying caretaker arrangements only apply once an election has been called.

"Stephen will lead NBN as the rollout continues to gather pace connecting thousands of homes and businesses across the country," he said in a statement. "It remains on track for completion in 2020."

The government is sticking to its official end date for constrution of the NBN despite delays on some parts of the network, including a freeze on HFC connections in late-2017 after there was a spike in complaints.

On Wednesday morning, the Australian Communications and Media Authority warned telcos of potential new penalties of up to $10 million if recently announced rules for migrating customers onto the NBN are breached.

The ACMA has warned against "buck passing" between the NBN and the telcos when it comes to resolving customer complaints.

ACMA data shows a third of households and 40 per cent of businesses surveyed said they had experienced a period without a landline or internet service when they were migrated onto the NBN, with about 15 per cent of cases leaving customers without services for more than a week.

Mr Rue's appointment was approved by the NBN board in recent weeks following a competitive hiring process.

Kerry Schott

Kerry SchottCredit:AAP

It was then ratified by Federal Cabinet on Monday night, sources said. The government also reappointed non-executive directors Kerry Schott and Shirley In't Veld to the board.

Mr Rue will be paid a $1.8 million base salary and a 50 per cent annual incentive, contingent on reaching milestones in a scorecard approved by the board.

NBN Co chairman Ziggy Switkowski said in a statement that having an internal candidate “reduces the risk of loss of momentum in the business from the leadership change”.

“With the network construction moving through a critical phase en route to completion in 2020, the board considered Stephen’s experience, including at NBN Co, and skills in financial, operational and project management to be especially well suited to the challenge,” he said.

“I am honoured to lead the dedicated and hardworking team here at NBN Co, as well as continuing to work with our industry partners,” Mr Rue said in a statement.

“I joined NBN Co because I knew it would make a difference to Australians," he said. "I look forward to continuing this journey, which will have a real impact on health, education, job creation and prosperity into the future.”

'Relentless' time

Current chief executive Bill Morrow announced his departure from the NBN Co in May, two days after his fourth anniversary at the helm, describing his time as the network's boss as "relentless".

In an email to staff at the time, Mr Morrow said it was with a “heavy heart” he was leaving the NBN to “pursue the next chapter” of his career.

Mr Morrow recently declined to comment on his future plans when asked by Fairfax Media.

Jennifer Duke writes about media and telecommunications.

John McDuling writes about business, media and technology. Previously he was a reporter for Quartz in New York, covered telecommunications and markets for the Financial Review, and worked in the finance industry.

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