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The fallen chief executive says the government planned to privatise the national mail carrier to boost its own bottom line. But Christine Holgate had other plans. By Karen Middleton.

How Christine Holgate lost her job trying to save Australia Post

Former Australia Post chief executive Christine Holgate at the senate inquiry on Tuesday.
Credit: AAP / Mick Tsikas

The story of Christine Holgate’s removal as chief executive of Australia’s postal service goes well beyond what she says was a prime minister and a chairman bullying a woman out of her job.

It is now also the story of an alleged secret plan to run down, break up and sell off bits of Australia Post – a plan intended to boost the government’s bottom line – and of tactics employed to get rid of an executive standing in the way.

This week, Holgate placed on the public record a body of evidence suggesting Prime Minister Scott Morrison’s enraged attack on her integrity in parliament last year was part of a much bigger government agenda.

At the time, Morrison said Holgate should stand aside or “go” after it was revealed she used Australia Post funds to reward four executives with $5000 Cartier watches. Holgate says the watches were meant to be “something special” in gratitude for a Bank @ Post deal that had earned the taxpayer hundreds of millions of dollars.

“They brought in $220 million,” she told Sky News on Wednesday. “They saved banking in rural and regional Australia. Everyone seems to forget that small fact. This was an incredible – the biggest – investment into Australia Post made from the outside in our whole history.”

Morrison and colleagues have said repeatedly that the decision did not “pass the pub test”. On October 22 last year, within hours of the watches revelation, Morrison told parliament Holgate had been instructed to stand down. He said he was “appalled” and that the gifts were “disgraceful”.

The behind-the-scenes events before and after that attack have now been dragged into public view. They form a bigger picture.

On Tuesday, Holgate provided documents to a senate inquiry into Australia Post, suggesting the government’s agenda involved splitting off and selling its lucrative parcel service, which could damage the organisation’s profitability, resulting in permanently reduced mail and banking services, particularly in rural and regional areas. It could also cost thousands of jobs.

She is hinting strongly – without alleging it outright – that Morrison seized on the luxury watches to whip up public controversy and force her out of her job.

“The simple truth is I was bullied out of my job,” Holgate told the senate committee. “I was humiliated and driven to despair. I was thrown under the bus so the chairman of Australia Post could curry favour with his political masters. But I’m still here and I’m stronger for surviving it.”

Lucio Di Bartolomeo – the agency’s chairman, who ultimately stood down the chief executive – has praised Holgate’s work but rejected her assertions.

Holgate is now taking a scorched-earth approach to setting the record straight.

She insists she has not quit – despite the government announcing her replacement, Paul Graham of Woolworths, on the morning she was due to give evidence.

She says she drafted an unsigned resignation letter, which she sent the chairman on November 2 last year, after a media report suggested she had resigned. At the same time she asked for clarification of his view on her position, warning she would go public.

But she says she never signed the letter or actually resigned.

The government insists she did resign and rejects her version of events. This week, she foreshadowed possible legal action.

On Wednesday, Morrison said he regretted if his language and demand for her resignation had upset the highly accomplished executive. He has declined to offer her the public apology she seeks.

“It was a willing day in the parliament,” Morrison said of his October 22 statement. “The language in the parliament was very strong. It was not my intention to cause distress to Christine Holgate and I regret any distress that that strong language may have caused to her and indeed did cause to her. That was not my intention.”

Di Bartolomeo told the senate inquiry on Tuesday that he was acting on Communications Minister Paul Fletcher’s instruction when he stood down Holgate last year. “I took on board his position that … there would be an investigation [into the watches]. He wanted us to support the investigation and he wanted us to look at standing Christine down.”

The Australia Post chairman said he asked Fletcher if he was sure about standing down Holgate – and the minister said he would check and “come back”. That conversation was at 1.09pm. Fletcher called back at 1.30pm to confirm that Holgate should be stood down. Question time began at 2pm.

On Wednesday this week Fletcher told Sky News he was acting after a conversation with Scott Morrison. The minister was asked if Holgate had received due process, given she insists she did not. His version of the sequence of events was that “Ms Holgate has resigned”.

Fletcher sought to turn the focus to Labor and its senator, Kimberley Kitching, whose questions of Holgate during the senate hearing in October last year – asked after Labor had been tipped off about bonus gifts – elicited the confirmation of the watches. The gifts had been made two years earlier.

Fletcher said Kitching’s questioning was “a political hit job”.

On the day of the revelation, the Labor leader, Anthony Albanese, called for Holgate’s resignation.

But the investigation the government subsequently ordered found Holgate had acted within her executive remit. It found she had the authority to award bonuses of up to $150,000.

Fletcher insists the investigation found the watches were not an appropriate reward. Holgate disputes this.

But there is a further story surrounding the removal of Christine Holgate.

That is in how the government used emergency powers designed to address the Covid-19 pandemic to bypass parliament and cut back Australia Post’s delivery services.

Its apparent intention – not publicly declared – was to make those changes permanent, linked to the proposals Christine Holgate has revealed.

In May last year, the government used emergency powers under the Biosecurity Act to enact regulations by delegated legislation that cut daily postal deliveries back to every second day.

The government eased the next-day delivery requirements for letters posted within a capital city – and four business days for city delivery letters from interstate or regional areas – out to between five and seven business days. And it scrapped the Express Post priority-post guarantee.

The Covid-19-linked regulations also modified the requirement that Australia Post maintain 4000 postal outlets across Australia, so it is required to keep them only “where reasonably practicable”.

These regulations are due to expire on June 30, meaning Australia Post is supposed to restore cut services after that – unless the government takes steps to extend the measures or make permanent changes.

After it introduced the regulations, the government commissioned a review to consider future options for Australia Post.

Holgate says the “secret review” by consultants BCG – Boston Consulting Group – found she was “too optimistic” in believing the business could grow. She says it produced four options for the future.

“They go through really simply and they talk about cuts, cuts, cuts, cuts,” she told Sky News. “And I said, ‘No.’ It’s not what I believe is right for our business. It’s not what I believe is right for our country.”

She says if proposals to remove services are accepted, local post office franchises will no longer make a profit, meaning “mum and dad businesses are left with that debt”.

Holgate’s evidence suggests a plan to break up Australia Post was orchestrated with deliberate secrecy, without the knowledge and understanding of those who, she says, really own Australia Post – the people of Australia.

“Long before I joined Australia Post, BCG did another review and interestingly came up with a very similar finding. You know ‘It’s all too risky, they’re never going to grow, let’s cut down the letter services and sell off the parcels, this will be the best way forward.’ And of course, it would give the government of the day a big, fat, healthy dividend – probably about $5 billion – if they did that.”

She says the options in the recent report included “divestiture”. “My strong recommendation is that would absolutely be a disaster,” she told Sky News.

Holgate says cutting those services would be “crippling” for Australia Post, for local post offices and for “the hundreds of thousands of people who are employed via Australia Post” either directly or indirectly as contractors.

Sky News presenter Peta Credlin, formerly chief of staff to prime minister Tony Abbott, asked Holgate if her objection was the real reason she was removed.

“I don’t know,” Holgate replied.

On Tuesday, during the senate committee hearing, Labor’s Senator Kim Carr asked the same.

“I think it would be fair to say, senator, I wasn’t popular,” Holgate replied.

She strongly criticised the government’s refusal to make the BCG report public, which she said cost about $1 million to produce. “It’s the people of Australia’s,” Holgate said. “They paid for that report. Let them see it.”

Morrison and Paul Fletcher are unmoved by her allegations, insisting the whole issue is a matter of accountability for public expenditure.

“This was public money, this was taxpayers’ money – that’s a very important point,” Fletcher told Sky News on Wednesday. “... We do take very seriously the spending of public money. Let’s be clear – $20,000: that’s a pretty significant fraction of the average income in a year of a typical Australian.”

But the government’s inconsistent application of outrage at executive largesse is inviting some stark comparisons.

A range of people have pointed out that executives of the government-owned National Broadband Network were paid $77 million in bonuses with absolutely no complaint from Fletcher or others in the government.

Fletcher says the difference is that the NBN used “documented procedures”. Holgate accuses the government of hypocrisy.

She also points to the auditor-general’s finding that the Infrastructure Department paid $30 million for a piece of land around the site of the pending Western Sydney airport that was valued at $3 million.

The auditor-general is examining other government programs with opaque accountability processes, including the $500 million commuter car park fund established before the 2019 election, to fund infrastructure in selected Coalition marginal seats and for which the Infrastructure Department confirmed there were no eligibility criteria.

The saga around the treatment of Christine Holgate has united some traditional combatants.

The communications union is critical of bonuses being given while postal staff – front-line workers during the pandemic – are still fighting for a basic pay rise to compensate them for their efforts.

But it praises the work Holgate has done in securing a deal with big banks that saved thousands of postal jobs, particularly in country Australia. In an interview on ABC TV’s 7.30, Holgate thanked the unions.

Similarly, Nationals senate leader Bridget McKenzie has made a sudden public defence of Holgate this week. It was not just about her concern at the treatment of a female executive; it revealed she, too, believes Holgate saved postal and banking services in the bush.

“Thank you on behalf of community post offices around the country,” McKenzie said to Holgate during the senate hearing. “What a turnaround to their financial sustainability – thanks to your leadership.”

As a result of Holgate’s statements this week, Paul Fletcher has been forced to declare the government will not be selling off Australia Post.

Asked if the parcel business would be sold, he offered a carefully worded not-quite-denial. “That is not our intention,” he said.

Perhaps that will be some consolation for Australians who want to keep their postal service intact and in public hands. But it may not be much consolation for Christine Holgate, for whom there is no going back.

This article was first published in the print edition of The Saturday Paper on Apr 17, 2021 as "How Christine Holgate lost her job trying to save Australia Post".

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Karen Middleton is The Saturday Paper’s chief political correspondent.