Keen questioning by Victorian Labor senator Kimberley Kitching revealed to an indignant world last October that in 2018 the Australia Post chief executive, Christine Holgate, had given four of its senior employees Cartier watches valued in total about $20,000 as a reward for good work, apparently in addition to any performance bonuses they may have been eligible for. If she were to remain in the Senate for another 1000 years, citizens might still say "This, was Kimberley's finest hour."
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The Cartier revelation caused media companies around the country to burst their boilers leaving the Prime Minister with a choice.
He could say something sensible and look weak or something ridiculous and look strong. Led by the nose of apparent enraged community sentiment, he chose to be ridiculous and strong.
He waxed exceedingly wroth saying he was "appalled" and thought the business was "disgraceful and not on", bellowing that "The chief executive has been instructed to stand aside, if she doesn't do that, she can go".
With her options so narrowed, Ms Holgate resigned on November 2, 2020.
It was another unedifying example of political leaders feeling obliged to toe the line of public outrage. It has always been so in varying degrees although it may be that outrage has rarely been as far in front of sensible political leadership.
So far as the Prime Minister is concerned, bonus payments to some senior staff in the public service, for which he is the responsible minister, would enable recipients to buy dozens of Cartier watches and in one case more than a 100 of them, according to data published by the Public Service Commission.
Inconveniently in the last month the Commonwealth-owned NBN Co shelled out $77 million in performance bonuses, enough to corner a generous segment of the Cartier world market.
At the time of writing, the PM has said nothing about this extravagance and so a lack of political leadership has been coupled with a dose of double standards.
Of course the Cartier saga warranted "a formal investigation". The departments of Communications and Finance were summoned, a common practice enabling investigations to be done by officials subordinate to ministers and therefore more controllable.
To someone's credit however, the departments hired the law firm Maddocks to conduct the investigation. Curiously its report, recently made public, doesn't mention the motive force behind it - the Prime Minister's fury at the Cartier bequests.
Nevertheless, the report should suit the Prime Minister as it provides a cover, not all that convincing, for his self-righteous anger.
Maddocks' main findings are that:
- There's "no indication of dishonesty, fraud, corruption or intentional misuse of funds" in the purchase of the watches.
- Australia Post's board had no policy that would cover rewards of that kind.
- The board didn't approve the purchase and it's uncertain whether the former chair did - he says he didn't and the former chief executive says he did. It is worth noting, however, that the cards presented with the watches were signed by both the CEO and the chair of the board.
- The watch purchase "was inconsistent with the obligations imposed by Public Governance, Performance and Accountability Act" [also described in the report as "not fully consistent" with the Act] and did not satisfy "public expectations in relation to the use of public resources...".
Maddocks also says:
- Board members had "varying levels of understanding" of their obligations - that's unexceptional and Maddocks doesn't say if it's a problem.
- Board and management delegations would seem not to be in great shape. For example, it's said that the chief executive's "role in relation to 'incentives and performance management processes' is to endorse decisions of the Human Resources General Manager".
- According to the Chief Financial Officer the purchase of the watches was "within the CEO's delegation for expenditure".
- All Post board members were not interviewed as part of the investigation and some appear not to have agreed to be interviewed. Whatever, all board members have attempted to put as much distance between them and the watches as they can.
- All of the board members interviewed say they would not have approved the purchase and the current chair says he would have blocked it. Well, they would say that wouldn't they given the PM's rage, and the three Liberal Party luminaries on the board could have been helpful in solidifying those views.
Then there's what Maddocks doesn't say - in particular, the report doesn't say that Ms Holgate's purchase of the watches was something warranting the ending of her appointment as the chief executive.
The Prime Minister could have responded to the Kitching revelations saying "Well, this is between the Board of Post and the CEO, as the Board appointed Ms Holgate and is responsible for her tenure. But a $5000 reward for sterling work doesn't seem excessive. There are middle ranking public servants who regularly are given as much and some a whole lot more. And any executive in the Murdoch organisation would probably be insulted by a $5000 performance payment."
If the PM had so spoken, it's likely Ms Holgate would still be the Post chief executive, there would have been no Maddocks report and the taxpayer would not have had to fork out for an investigation that most likely has cost a whole lot more than $20,000. Still, politics is a expensive business.
Australia Post's annual revenue is about $7 billion. It has a workforce of about 50,000. It is entirely appropriate for the CEO to determine performance rewards for senior staff.
There need be no imperative for Post's board to approve any such payments because its members are not in a position to appreciate the performance of senior staff near as well as the CEO.
The $20,000 Ms Holgate distributed between four employees is trivial compared to performance bonuses in the private sector and far less than those for many in other areas of Commonwealth employment. That is, the value of the payments made by Ms Holgate is unexceptional; the form of them did the damage, Cartier watches, a symbol of plutocratic privilege.
Maddocks doesn't acknowledge this crucial point. Rather, it indulges in an unconvincing interpretation of the PGPA Act with which it says the watch purchase was "not fully consistent", something that no doubt could be said of oodles of financial decisions in the Commonwealth.
Maddocks could more profitably have considered if Ms Holgate's decision was materially inconsistent with the Act and reached a conclusion about illegality or otherwise. It doesn't do so. A finding that it was not materially inconsistent would, of course, have made the PM's rancor look forced. In setting the bar as low as it can go, Maddocks has provided all the advice the PM could wish for.
Maddocks concludes with an equivocating examination of whether the watch rewards were consistent with "public expectations", an essentially unmeasurable barometer. Thus Maddocks says it's "not possible to definitively articulate", then threads its analysis with words like "may not have met", "tacit acceptance" and so on. Let's be blunt: in this context "public expectations" is a fancy way of saying "political embarrassment", a wholly unreliable basis for judging the remuneration of public officials.
So the upshot is that four senior Post staff are rewarded for good work, Maddocks has validated the Prime Minister's angst presumably at considerable cost to taxpayers and Post board members have deserted Ms Holgate who has been forced to walk the plank. What a tawdry episode in the "pro-integrity era".
Meanwhile the rolled gold remuneration scandal at Australia Post whereby its board made Ms Holgate's predecessor the highest paid official in the Commonwealth's history by a large margin, paying him a reported annual salary of about $7 million and a payout of about $10 million pretty much goes through to the keeper. That is, a board running a million miles from paying a performance reward of $20,000 for four senior staff, has no apparent regrets about paying its CEO $7 million a year. Like politics, chutzpah doesn't come cheap.
- Paddy Gourley is a former senior public servant. pdg@home.netspeed.com.au.