Not on my watch: Scott Morrison orders Australia Post boss Christine Holgate boss to take time out

Australia Post CEO Christine Holgate forced to stand aside after revelations the government-owned business bought four watches worth $12,000 for staff.

Australia Post chief executive Christine Holgate during Senate estimates in Canberra on Thursday. Picture: Gary Ramage

Australia Post CEO Christine Holgate has been forced to stand aside after Scott Morrison personally intervened and ordered an investigation into revelations the government-owned business had bought four Cartier watches worth $12,000 as rewards for senior employees.

The Prime Minister declared he was “appalled and shocked” by the purchase and within an hour of it being aired at Senate estimates on Thursday instigated a four-week joint investigation by the departments of Finance and Communications into the conduct of board members and the executive team.

Communications Minister Paul Fletcher and Finance Minister Mathias Cormann confirmed on Thursday night Ms Holgate, who on $1.6m a year is Australia’s second-highest-paid public servant, would stand aside for the duration of the investigation, to begin “immediately”.

“That report will come back to me and members of my cabinet and if there are issues to be addressed with board members, then they will be addressed then,” the Prime Minister said in question time.

“We are the shareholders of Australia Post on behalf of the Australian people … She (Ms Holgate) has been instructed to stand aside. If she doesn’t wish to do that, she can go.”

There are expectations within the government Ms Holgate will not return. She also sits on the government-funded Nation Brand Advisory Council, which designed the controversial golden wattle logo, and the Australia-ASEAN Council board.

The departments will report back to federal cabinet within a month, with the government on Thursday seeking legal advice as to whether Ms Holgate will be paid while on leave.

Four Australia Post staff received $3000 Cartier watches in October 2018 after clinching a deal with three of the four big banks and other financial institutions. The deal was worth $66m to Australia Post, with the Commonwealth Bank, NAB and Westpac each paying it $22m.

In budget estimates under questioning from Labor, Ms Holgate confirmed executive member Gary Starr, general manager Deanne Keetelaar, general manager Anna Bennett and former executive member Greg Sutherland were gifted the watches for the “Bank@Post” deal, which allows Australians to access banking services at Australia Post.

Asked by Victorian Labor senator Kimberley Kitching if she considered it “appropriate to use taxpayers’ money to buy Cartier watches for already highly remunerated Australia Post executives”, Ms Holgate responded: “I have not used taxpayers’ money, we are a commercial organisation.

“There were a small number of senior people who’d put in an inordinate amount of work and they did receive an award from the chair, myself and on behalf of the board. It was a recommendation from our chair that these people get rewarded.”

Australia Post’s chair at the time was John Stanhope, who did not respond to a request for comment but told the Australian Financial Review he could not recall authorising the purchase.

Ms Holgate did not know what type of Cartier watch the men and women received, nor what credit card was used to pay for the gifts.

Mr Starr, executive general manager of Australia Post’s business, government and international section, was at the estimates hearing but said he was not wearing the watch nor had he given it to a loved one. He was paid $809,648 in the 2019-20 financial year.

The Community and Public Sector Union, which represents Australia Post workers, said Ms Holgate must resign.

“Our members have been working harder and longer to help the community in the pandemic, all while taking a pay freeze, and how are they rewarded? Not with a watch or a bonus, I can tell you that,” deputy national president Brooke Muscat said.

“This is what happens when you appoint your mates to the board and ignore the warning signs. Australia expects better than this.”

Mr Fletcher told parliament he was “shocked and concerned” by the watches purchase and had told chair Lucio Di Bartolomeo, appointed by the Coalition in November last year for a three-year term, that government business enterprises “need to take great care with taxpayers’ money”.

“This is a matter the Australian government takes very seriously,” he said. “We expect the board and management of government business enterprises to deal with taxpayers’ money with scrupulous care and that is what this investigation will be focused on, and it will examine the conduct of all involved.”

Senator Kitching said Labor would compel Mr Di Bartolomeo to attend a spillover estimates session on November 13 by moving a motion in the Senate if he did not voluntarily appear.

“We want him to answer questions about extravagance, about the last financial year’s reports. Why can’t they answer questions about $300,000 spent on the office of the CEO’s credit card?” the opposition assistant minister for government accountability said.

“The executives were going to give themselves bonuses of $7m divided of a team of eight senior managers. Why has the chair been in hiding?”

Opposition communications spokeswoman Michelle Rowland seized on the watch purchase, saying it did not meet a high standards test.

“Australia Post is a cherished national institution and it must set a high standard. Today’s evidence that $12,000 was used on luxury watches does not meet that test,” she said. “The Australia Post Board is a dysfunctional swamp of former Liberal politicians, party hacks, and mates of Scott Morrison. This board is incapable of executive oversight and must be cleaned up.”

Ms Holgate announced a 30 per cent rise in full-year profit to $53.6m in August and unveiled a record revenue of $7.5bn off the back of demand for parcel deliveries during the pandemic.

A month later, Mr Di Bartolomeo announced the board would not approve up to $7m in bonus payments for Australia Post executives after workers were asked to volunteer to clear a backlog of parcel deliveries. Bonuses worth $97.4m went to posties, contractors, licensees and general managers and included $27.2m in “thank you” payments to staff for working through COVID-19.

In addition to his Australia Post appointment, Mr Di Bartolomeo was appointed by Senator Cormann as Australian Naval Infrastructure chair and Moorebank Intermodal Company deputy chair.

The Australia Post remuneration report lists Mr Di Bartolomeo’s package as $119,849. He also earns $95,350 as Moorebank Intermodal deputy chair and $119,180 as Australian Naval Infrastructure chair.

Former senior Coalition government and party figures Bruce McIver, Tony Nutt and Michael Ronaldson are directors on the Australia Post board.

Former Victorian Labor trade minister Philip Dalidakis also held the role of executive general manager of corporate services for seven months before departing earlier this year.

In 2017, Australia Post revealed former chief executive Ahmed Fahour was paid $10.8m after quitting the top job following a political and public backlash over his remuneration.

Mr Fahour, who ran Australia Post for seven years, received an exit package of $6.8m in the 2017 financial year and an additional $4m in long-term incentives awarded in 2015 and 2016.

When Ms Holgate, who previously ran health manufacturing giant Blackmores, replaced Mr Fahour, she was limited to a maximum pay deal of $2.75m including a fixed base salary of $1.375m.

Announcing Ms Holgate’s Australia Post appointment in June 2017, former communications minister Mitch Fifield and Senator Cormann described her as a “highly experienced chief executive, board director and business leader with a strong record of managing and leading large and complex organisations”.

Australia Post’s only shareholder is the federal government.

Additional reporting: Jared Lynch