Senate debates

Wednesday, 8 February 2017

Committees

Environment and Communications Legislation Committee; Additional Information

5:34 pm

Photo of James PatersonJames Paterson (Victoria, Liberal Party) Share this | Hansard source

I present additional information received by the Environment and Communications Legislation Committee relating to the supplementary budget estimates 2016-17. I move:

That the Senate take note of the report.

The documents I have tabled on behalf of the Environment and Communications Legislation Committee relate to evidence the committee has sought from Australia Post. The committee that I chair has oversight of entities with the highest-paid officials in the Commonwealth: Australia Post and NBN Co. As government business enterprises, the remuneration paid to their executives is relevant when scrutinising the performance of these entities.

During supplementary budget estimates, my colleagues Senator Dastyari and Senator Urquhart pursued a line of questioning with Australia Post's managing director regarding both the remuneration he receives and the remuneration paid to other executives at Australia Post. In previous years, the information that senators sought was included in Australia Post's annual reports. Minimum reporting requirements have changed over time and under the current rules Australia Post is not explicitly required to include details about individual executive remuneration in its financial statements. Nevertheless, one would assume that Australia Post would willingly provide such information during Senate estimates if requested.

It therefore came as a surprise that Australia Post sought to provide information about the remuneration received by its Managing Director and other executives on a confidential basis, outside of the estimates process. As senators are aware, all evidence during Senate estimates is to be taken in public session. Senate estimates is a key accountability mechanism, and one of its principal features and strengths is that it is open and transparent.

Nevertheless, Australia Post argued that public disclosure of executive remuneration would not be in the public interest. Among the various reasons given was that disclosure may harm the commercial interests of Australia Post and would involve the unreasonable disclosure of personal information. It was also asserted that disclosure of the information would not promote or inform debate about issues of public importance. However, the committee did not accept these reasons. The wider public interest is best served by this information being published. On the environment and communications committee, we do not always agree. In fact, we often disagree. But on this issue, senators from all parties were in unanimous agreement every time we discussed this issue.

Senators can easily find out the remuneration paid to departmental secretaries and agency heads. We can also find out the remuneration of executives of companies listed on the ASX, such as the CEOs of the major banks. These companies are legally required to disclose senior executive remuneration to inform their shareholders. The salary of the United States Postmaster-General is also reported annually. Despite the transparent remuneration processes that exist elsewhere in the public sector and corporate Australia, the committee was asked to accept that the salary of the Managing Director of Australia Post should be protected from public scrutiny.

Australia Post is not a private company. It is a wholly government-owned business enterprise. If anything, we should expect higher standards of disclosure, transparency and accountability of a government enterprise than we do of private companies. The operations of Australia Post clearly have a very large financial significance to the Commonwealth. Accordingly, Australia Post's management should expect tough questions about their performance and the decisions they have taken.

The nature of public sector accountability necessitates the open disclosure of key information about the performance and financial position of Commonwealth entities to the parliament. Disclosing information to one committee only, on a confidential basis, is inadequate. All senators have the responsibility to scrutinise public expenditure and the conduct of public administration. We need to assess the relevant information to fulfil this obligation.

I anticipate that senators may have further questions about remuneration at Australia Post. It is useful to note that this is not the first statement the committee has made about whether the current approach to disclosure requirements for executive remuneration at Australia Post is adequate. During the previous parliament, when the committee was chaired by my colleague Senator Reynolds, the committee raised this issue when it reported on Australia Post's 2015 annual report. More recently, the disclosure requirements relating to executive remuneration have also attracted the attention of the Auditor-General. In his recent audits of the financial statements of Australian government entities, published in January, the Auditor-General concluded:

There would be benefit in government considering making the aggregate level of transparency for key management personnel remuneration in the public sector consistent with that required for listed entities.

Given both a senate committee and the Auditor-General have identified issues with the reporting of remuneration by Commonwealth entities, there appears to be merit in considering whether the disclosure requirements can be enhanced.

In this regard, I draw the Senate's attention to NBN Co, another wholly government-owned business enterprise, which publishes detailed information about the remuneration paid to individual senior executives as part of its annual report. When examining NBN Co, senators do not need to spend time seeking basic facts about the remuneration of its executives. Australia Post's management should follow NBN Co's example and be up-front with the parliament and the Australian people about the remuneration they receive. It is frustrating that the committee's time and resources have been spent pursuing a basic element of accountability. However, I hope this episode serves as a timely reminder to Australia Post that it is accountable to the parliament and its committees for the use of the public resources with which it has been entrusted.

Question agreed to.

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