Australia Post CEO Christine Holgate is standing down while the government investigates a $12,000 luxury watch splurge. Here’s how the company got to this point.

Australia Post CEO Christine Holgate has been stood down while an investigation is held. (Peter Rae, SMH)
  • Australia Post CEO Christine Holgate has been stood down while a four-week investigation takes place.
  • It comes after revelations that $12,000 of company money was spent on four luxury Cartier watches for employees.
  • It’s the most recent of a long list of largesse scandals that have plagued the Commonwealth-owned business.
  • Visit Business Insider Australia’s homepage for more stories.

The national postal service has been forced to open an investigation, as pressure mounts on the embattled enterprise to explain itself to the public.

On Thursday, an explosive Senate Estimates hearing heard how four luxury Cartier watches had been gifted to senior employees, costing the princely sum of $12,000.

CEO Christine Holgate told senators that the gifts were a reward for securing a deal with NAB, Westpac, and the Commonwealth Bank that would enable customers to do their banking at post offices around the country.

“There were a small number of senior people who put in an inordinate amount of work in, and they did receive a reward,” Holgate said.

But neither Holgate, nor her chief financial officer (CFO), could provide more details on the watches, nor which company credit card was used to pay for them.

While Australia Post doesn’t directly receive government funding, it is wholly owned by the federal government, and – by extension – the Australian public.

It’s the former point that Holgate tried to stress on Thursday to defend the business she helms.

“I have not used taxpayers’ money. We are a commercial organisation,” she said. “It was a recommendation from our chair that these people get rewarded.”

This is awkward. Holgate has been stood down after a deal struck with, among others, Matt Comyn’s Commonwealth Bank. (James D. Morgan, Getty Images for CBA)

It didn’t appear to carry much water, however, with her three-year tenure at serious risk as Prime Minister Scott Morrison declaring he was “appalled and shocked”.

“We are the shareholders of Australia Post on behalf of the Australian people,” he told Parliament.

The revelation unleashed a furious public response, with Holgate forced to stand down as a four-week investigation is launched into the affair. The finance and communications departments will oversee the inquiry.

“[Holgate] has been instructed to stand aside. If she doesn’t wish to do that, she can go,” Morrison said.

Rodney Boys, the CFO who didn’t know with what credit card the watches were purchased, will become acting CEO in the meantime.

Holgate is wary of Fahour furore as unions call for her dismissal

Operating as a business, and holding a quasi-monopoly over the postal system, Australia Post remains a lightning rod for public opinion, and often, deadly public frustration.

Holgate’s predecessor, Ahmed Fahour, was dismissed in 2017 after then-Prime Minister Malcolm Turnbull admitted his $5.6 million pay packet was “too high” – albeit not as high as the $10.8 million golden parachute Fahour would eventually take.

While Holgate took his place on a much-reduced $2.5 million salary, the CEO position remains the highest-paid civil servant gig going in Australia – not to mention one of the most politicised.

Hell, RBA Governor Philip Lowe scarcely takes home seven figures and he’s essentially in charge of Australia’s entire financial system.

So while $12,000 might pale in comparison to Fahour’s astronomical salary, the issue is the same. It’s also not the first indication of a kind of corporate lavishness.

It’s been revealed previously that Holgate, the former CEO of Blackmores, personally spent $300,000 on corporate credit cards, including paying for a chauffeur-driven car for 12 months, despite having her own set of wheels.

That’s not to mention the $119,000 given to management firm Domestique for just 38 days work.

It’s no surprise, then, that everyone from Liberal politicians to union officials are joining the outcry.

“The Government needs to intervene further than just wiping out the CEO – Australia Post needs a whole reshuffle to get their leadership team right. The board must step aside too,” Greg Rayner, national secretary of the CEPU Communications Union, said.

The ‘tip of the iceberg’ for Australia Post

But Rayner went one further, saying it was “just the tip of the iceberg” and “not surprising given the other shocking decisions coming out of Australia Post’s leadership this year.”

“In the middle of a pandemic, Australia Post decided to slow down deliveries right when Australians need the service the most,” he said.

“This seriously says something about the motivations of Australia Post’s executive team, chair and board.”

Australia Post has been stripping back deliveries to alternating days as it handles a record amount of post during the pandemic.

The timing of the investigation is hardly ideal then. With two months left until Christmas, it has already delivered more than triple the number of packages it does in a typical year.

Rayne provided CEPU data that he said shows the decision was slowing down the network and creating backlogs.

Australia Post’s compensation scheme would appear to disagree. Senate Estimates also heard how nearly $100 million in bonuses had been handed out this year, with the vast majority going to senior management.

Good work if you can get it.