For the first time in his prime ministership, Scott Morrison has fallen into a carefully laid Labor trap. The prime ministerial “mistake” has paralysed Australia Post’s top management and threatens its ability to deliver the unprecedented number of online parcels that retailers are looking to send out this Christmas.
As retailers wake up to the devastation that the PM’s actions may cause, they are desperately phoning government ministers and politicians trying to make them understand how serious this is for the nation.
In this commentary I will first set out what actually happened in AusPost; then explain how Labor used that situation to trap the Prime Minister and then offer a simple solution.
Sadly, almost our Prime Ministers suffer from the human sin of pride. Admitting error does not come easily to people in high office.
A big deal
As readers will know from my previous commentaries, the story starts two years ago when four AusPost executives lock in three major banks to provide their services via the AusPost and newsagent branch network. The deal boosts the post office’s revenue line by an incredible $100m a year.
A large portion is redirected to the 3000 post office branches, enhancing their viability and profitability. AusPost chief executive Christine Holgate became an Australian small business hero. Back in 2018, in explaining the four executives $100m achievement to AusPost’s directors Holgate recommended that they be rewarded. Although there was no specific board motion or a specific amount set, she left boardroom with a unambiguous mandate to reward each of the four executives. She chose $5000 each; a very low figure given the $100m annual income they had generated. Holgate used that $20,000 total to buy four Cartier watches. The Prime Minister was very badly briefed by his ministerial advisers and didn’t understand the achievement and that she had a clear board reward mandate. Scott Morrison demanded that she be stood down and that a high-powered month long investigation begin to turn the post office upside down.
What he also didn’t know was that a vile character assassination was being plotted against one of Australia’s top chief executives and he had been captured.
I can’t reveal the motivation of the Holgate character assassins because that would reveal the identity of the assassins.
Recent revelations in The Australian included expenses at the Grand Hyatt, chauffer cars and hair appointments. Holgate resides in Sydney but needed to spend a great deal of her time in AusPost’s Melbourne head office. Her remuneration contract was set by the independent Remuneration Tribunal and had AusPost paying her early Grand Hyatt expenditures. Once the tribunal-approved initial arrangement ended, Holgate, of course, paid her own Hyatt expenditures. The “chauffeur-driven cars”, were Ubers and hairdressing bills were confined to TV appearances and major speeches. It was crazy stuff but was a cleverly designed set up by ALP for the Morrison kill. The watches purchase was skilfully withheld.
And so, without warning when Holgate appeared before the Senate Estimates Committee, Labor sprung a question about watches. It was two years ago, and Holgate said the chairman and board had approved the watches, when what they had done was approve a reward but not the watches specifically. Nevertheless, a director had attended the watches presentation. By any standards in the world a $5000 reward whether it be watches or cash is incredibly small when executives delivered a $100m income. But Holgate wasn’t ready for the ALP Senate attack.
Step one in the Morrison entrapment had been successful.
Pulling the trigger
Step two. That vile character assassination had been quietly permeated into certain senior ranks of the Morrison ministry, so the Prime Minister was unaware that a pending question was a set up job.
Labor got wind that the ASIC situation was about to embarrass the government, so they carefully waited and then sprung the watches question on a Prime Minister, tiring from the long COVID battle. He had not done his homework and demanded Holgate be stood down and launched a top level investigation.
The celebrations in the ALP were boundless because they knew that this would paralyse the top of the post office and mean that Morrison would be responsible for the likely Christmas retail morass. It might even top Daniel Andrews decimation of retailing.
On the Australia Post board there was chaos. To obey the Prime Minister’s instruction they had to issue a proper legal stand down notice. But that would have required them to give reasons, which meant they would either have to lie and say they had not mandated a reward or they would have to admit that they had mandated a reward and that she was following their instructions. What to do?
Holgate made it easier for them by taking holidays so they wrote her a letter thanking her for “standing down” knowing she did not stand down because they had not issued a stand down notice.
As a result of a series of Coalition appointments control of the post office board is with the Liberal party faithful. On one hand they have their loyalty to the Prime Minister and on the other their obligations as directors of an enterprise that controls three quarters of Australia’s parcel business and is now vital to retail recovery.
Meanwhile, with no board direction and no CEO and a month-long top level investigation into the post office means that at the current paralysis atop AusPost will last well into December and beyond. Many of the 3000 post office branches are already feeling the impact and retailers have been warned of a possible Christmas catastrophe.
Morrison might be lucky and the momentum in the post office will carry the situation through, but it has never handled this number of parcels before and a smoothly performing senior management co-ordinated by one of Australia’s top chief executives is essential to the nation. The sad thing is that Josh Frydenberg, Michaelia Cash and of course the Prime Minister went out of their way to help small enterprises in the budget — it was a fantastic effort. All of that is in danger of being destroyed. And if AusPost breaks down as a result of the prime minister’s mistake, then Anthony Albanese becomes the prime minister in waiting.
To thwart the ALP the prime minister first has to understand the real facts as I set out above then swallow pride. Maybe he could ask AusPost to bring her back from holidays and defer the investigation until February in the interests of the nation. Holgate would remain on deck while the investigation took place.
Labor is optimistic that the Prime Minster will not be able to humble himself to do that. But if the Post Office fails to deliver the Christmas parcels Morrison must personally accept the full blame.
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