OPINION: Australia Post’s latest earnings paint a nightmare scenario for the $10 billion government business enterprise and its new chair Siobhan McKenna.
When Siobhan McKenna accepted the Albanese government’s invitation to chair Australia Post she must have known she was walking into one of the biggest operational and political challenges of her career.
The latest losses in the parcels business follow three years of stagnate profits caused by a blow out in expenses from $4.5 billion in 2019 to $6.8 billion in 2022. Expenses have been expanding much faster than revenue. Chanticleer’s analysis of disclosures in Australia Post annual reports over the past five years shows that the forward profit before tax estimates issued by the board have always been beaten.For example, in 2022 the board issued a profit target of $12 million and the result was $55 million. In 2021 the target was $55 million and the result was $110.7 million. In 20220 the target was $15 million and the result was $53.6 million. In 2019, the target was $25 million and the result was $41 million.
The 50 per cent weighting for short-term bonuses using the profit before tax measure is out of kilter with appropriate performance measurement because it is a guess of the letters losses and the parcels profits. Two clear benefits will flow to the community if McKenna can fix the remuneration mess at Australia Post.
Brown said: “Bonuses can be appropriate if they are used sparingly and if they are clearly linked to clear performance targets. Bonuses, as best as possible, should be linked, as I said, to performance, and that performance target should be fit for purpose.” When he appeared before Senate Estimates last year he said: “We have paid a range of bonus payments in relation to the last financial year—the performance of the business during that financial year.““These are at-risk payments as part of a contractual commitment based on a broad range of remuneration protocols the company follows.
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