Australia Post paralysed by PM’s actions, Christine Holgate should step down

Australia Post chief executive Christine Holgate has been punished despite doing a fine job. Picture: John Feder

I make this recommendation with great sadness. I believe that the chief executive of Australia Post, Christine Holgate, should step down. I make that recommendation because the Prime Minister’s actions have created paralysis in the AusPost top administration, which endangers thousands of retailers who are relying on AusPost to deliver an unprecedented mountain of online orders.

I wrote those words on Sunday afternoon. On Monday Holgate she stepped down. I think that Christine Holgate must have already been seriously considering stepping down on the weekend. Maybe my comment had a role. I am not going to change it but as you read the words below remember that Christine Holgate has taken the advice.

Hopefully the board can put together an administration of existing executives who have been well trained by Christine Holgate to enable the administration systems to fulfil those retail orders, which will help restore the fortunes of those parts of the retail industry that have been hit hard.

It’s ironic that Canberra is making life intolerable for the chief executive who undertook what was probably the biggest hiring of the pandemic: 5000 posties and other hands-on staff. Holgate’s “mistake” was to accept a clear mandate from her board to reward four executives who had landed a contract with three major banks that converted a loss-making operation to a profit — a $100m annual gain — and returned to prosperity 3000 Australian small enterprises who run post office branches or post offices in newsagents.

She chose $5000 as the reward figure but instead of giving the money in cash she rewarded them — in the presence of a director — with a $5000 watch. The reaction to the demand by the Prime Minister that she stand down among large corporate chief executives and the post office branch community has been a mixture of horror and disbelief.

Two events made me realise that despite those achievements she must stand down in the national interest. The first was the personal and desperate pleas from retailers, who could see the post office starting to become paralysed at the top while she was on forced “holidays”. (The board could not stand her down as the PM requested because she was obeying their mandate.)

The second was a totally unsolicited contact from two of our best and most respected corporate chief executives, who wanted to endorse Christine Holgate’s work at AusPost and in particular her attention to detail. But suddenly they pulled back because Canberra told them such endorsement might affect their relations with government. Parts of the Morrison ministry do not play by Marquis of Queensbury rules.

At that point I realised that Canberra had dug in and Christine Holgate’s position had become untenable and dangerous to the nation. To his great credit the chief executive of AustralianSuper, Ian Silk, was not intimidated and said publicly that she was an example for other chief executives to follow in her promotion of entrepreneurship.

Scott Morrison has been one of the most successful of Australia’s recent prime ministers and is very much in the mould of John Howard and Bob Hawke. We are very lucky to have him at this time.

But the pandemic has added to the burdens of prime ministership and that makes any leader vulnerable to make a mistake.

I don’t think the Prime Minister understood the watches had not been given during the pandemic but two years earlier; that there had been a board mandate for a small reward for boosting profit by $100m a year and helping save the 3000 small business branch network. And he also did not realise that her “holiday” and an extensive government inquiry would jeopardise the fortunes of so many retailers.

Morrison was very badly briefed.

For the ALP, they have at last discovered that their opponent is human and can actually make a major mistake. And when he does make a rare mistake he doesn’t know how to backtrack and move onto the next issue.

But for Australia the simple fact is that he hasn’t backtracked and he is prepared to risk the dangers to retailers created by a paralysed post office management.

The bank deals showed there is talent among the middle-ranking post office managers and left alone they should be able to manage the Christmas parcel boom.

The real weakness is the board, which is now controlled by members of the Liberal party. That’s where the Morrison inquiry should focus.

Scott Morrison showed in his decision to appoint Ita Buttrose as chairman of the ABC that he knows that running government-owned bodies competing with private enterprise requires talent in that industry. The boards should not be dominated by members of the political party that happens to be in government.

Just as the ABC needed media expertise at the top, so the AusPost board needs talent in transport and logistics and in running a $15bn enterprise that is competing with the largest transport companies in the world — and beating them.

I hope the investigation concentrates on the board, leaving management free to undertake the task of distributing an unprecedented amount of parcels.

If we are to have an investigation into management practices let’s do it after the Christmas parcel avalanche. And finding a CEO to run this vast $15bn enterprise will not be easy. Few outside CEOs would accept $1.6m remuneration, a Liberal party controlled board and a Minister that sometimes likes to be involved in routine matters.

If Christine Holgate takes my advice and stands down it is worth noting a few of her achievements:

● She stripped costs from the centre and redirected them to the front line — corporate costs were down over $60m and executive remuneration continues to be reduced significantly. This is where the opposition originated.

● While most major banks shut their few remaining regional branches during COVID-19, Australia Post offices remained open, enabling regional town banking to continue.

● AusPost now handles 80 per cent of Australian e-commerce and during her reign it invested $316m to build future capacity, including its first parcel super hub in Brisbane — the largest in the Southern Hemisphere.

● PwC forecast AusPost was headed for a $296m annual loss; instead it generated a profit of $53m.

● The pandemic has decimated post offices around the world with two exceptions: Deutsche Post and Australia Post.

With the Australia Post and Blackmores achievements behind her, Holgate could become one of the most valued CEOs in the land — if she wants to go again.