Cross Post: Adam Piggott Robert Gottliebsen has no business being a business columnist.

Writing in The Australian Robert Gottliebsen attempts to make the claim that the CEO of Australia Post is not overpaid. Currently the CEO, Ahmed Fahour, is the highest paid public servant in Australia and the highest paid national post service CEO in the entire world. He commands an annual salary of $5.6 million.

The world’s parcel express transport giants such as DHL, FedEx and the Japan Post-owned Toll must have been chuckling with joy at the controversy over the salary of Ahmed Fahour.

From the Prime Minster down, Australians have compared Fahour’s job as chief executive of Australia Post with similar post office executives around the world. It’s absolutely the wrong comparison because Fahour is also heading a parcel express transport business that competes with the global majors. And he is winning!

Gottliebsen’s entire premise is founded on the assumption that it is the role of government to compete with private businesses. This is patently untrue. The role of government is to provide services which private enterprise is incapable of providing. It is not the role of government to utilize money that has been taken by taxpayers to prop up a service that has been rendered obsolete by the rise of more efficient private competitors, let alone squander such funds on immense personal salaries for high level executives. Why on earth the Australian government has decided that it needs a “parcel express transport business” is beyond me. Next they’ll be deciding that they need to enter the internet telecommunications field.

The other porky uttered by Gottliebsen in his meandering screed is the hilarious claim that Australia Post not only competes against the international giants but that it is winning. Any poor schmuck who has had the total displeasure of utilizing Australia Post’s services knows that he will be overcharged, his parcel will take much longer to arrive at its destination, and if it gets lost on the way, which is an increasingly likely outcome, he will have no recourse available to him.

Fahour went to Australia Post because he saw the potential to dominate the parcel business and develop an enormous government-owned business — a task few people in Australia have achieved against international competition and one that is rare in the world.

That was in 2008. The correct response to the rise of private enterprise that was effectively competing with an outdated government institution would have been to privatize it or close it down. But instead the government threw huge amounts of taxpayer’s money at the edifice. And what has been the end result?

Poor old Japan Post paid $6.5bn for Toll partly in the belief that public servant Fahour would be a push over. Now Japan Post has changed Toll’s CEO and is about to embark on massive retrenchments. In fairness, Toll’s problems also reflect the international business.

Massive retrenchments? You don’t say. So let me get this straight – the Australian government has utilized a huge amount of taxpayer’s money to compete against private enterprise with the end result being that a massive number of job losses are predicted. Job losses in the private sector. Jobs that were paying the tax that enabled the Australian government to compete against them in the first place. Jobs that will no longer pay any tax in the future.

The Australian government has used money taken from Australians to effectively drive them out of their own jobs. That this is allowed to happen is simply criminal. That Robert Gottliebsen, writing for the apparently conservative newspaper The Australian, thinks that this is a matter to be celebrated is a disgrace.

First posted at <a href=”https://pushingrubberdownhill.com/2017/02/15/robert-gottliebsen-has-no-business-being-a-business-columnist/”>gentleman adventurer</a>.

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35 Responses to Cross Post: Adam Piggott Robert Gottliebsen has no business being a business columnist.

  1. NewChum

    Not only does Australia post waste money and give poor service, it also competes with small business for retail sales in the office/home supplies arena.

    In my local shopping centre it sits between a 2-dollar shop and a newsagent, and Aus post is filled with products on offer in both the other stores. But it uses its government- paid rent and monopoly on people visiting to up sell them on products while they are standing in the long queues.

    The ‘shop’ could be reduced in size by 3/4s, with taxpayers saving on rent, and private businesses not competing with a government institution through lost sales, thereby generating more profit and more tax, with more choice for the consumer.

    The fact that Australia has essentially a monopoly parcel delivery service is well reflected in the prices and delivery times. Ups and FedEx can deliver in a fraction of the time and price in the USA.

  2. LGS

    Gottliebsen’s entire premise is founded on the assumption that it is the role of government to compete with private businesses.
    Begs the question of why we have the fully taxpayer-funded ABC then!

  3. sfw

    Adam, Congrats on getting a gurnsey here at Catallaxy. Good Post.

  4. jupes

    Massive retrenchments? You don’t say. So let me get this straight – the Australian government has utilized a huge amount of taxpayer’s money to compete against private enterprise with the end result being that a massive number of job losses are predicted. Job losses in the private sector. Jobs that were paying the tax that enabled the Australian government to compete against them in the first place. Jobs that will no longer pay any tax in the future.

    Devastating indictment.

  5. JohnA

    LGS #2297369, posted on February 15, 2017, at 2:15 pm

    Gottliebsen’s entire premise is founded on the assumption that it is the role of government to compete with private businesses.

    Begs the question of why we have the fully taxpayer-funded ABC then!

    And each deserves the same answer: Rabz Doctrine Now!

    Reduce Australia Post to its community service component via the basic letter rate – maybe!

  6. jupes

    No public servant should earn more than the Prime Minister.

    If they want the big bucks they need to go into private business.

  7. struth

    Good post.
    Thank God.
    Sinclair turning to the dark side and even Momty dribbling shit in posts, I was truly getting worried about this blog.
    Breath in the fresh air.

  8. Combine Dave

    Not only does Australia post waste money and give poor service, it also competes with small business for retail sales in the office/home supplies arena.

    How? If you wanted to buy a pen or a note book why not get it while you were shopping at the groccery shop or the if you wanted something very flash/special/hard to find – order online/>

    In my local shopping centre it sits between a 2-dollar shop and a newsagent, and Aus post is filled with products on offer in both the other stores. But it uses its government- paid rent and monopoly on people visiting to up sell them on products while they are standing in the long queues.

    Does not compute. A giant queue is a massive turn off to making a quick purchase.

    Obviously if you need to post a parcel and buy a sweet new pen you might pick it up at the same place, but it doesn’t seem likely given Aus Post prices for office supplies while not exorbitant are hardly the cheapest.

    Maybe the quality of the $2 shop office goods are simply too poor and the news agent both too low quality and overpriced?

    The ‘shop’ could be reduced in size by 3/4s, with taxpayers saving on rent, and private businesses not competing with a government institution through lost sales, thereby generating more profit and more tax, with more choice for the consumer.

    Why?

    Either privatise it and sell it off or if that’s not possible simply close it. Plenty of alternatives now, there’s no reason a all for any of Australia’s prominent monopolies, whether AusPost, Energex or the ABC to continue along existing on the public’s dime into the 21st century.

  9. Combine Dave

    Good post.
    Thank God.
    Sinclair turning to the dark side and even Momty dribbling shit in posts, I was truly getting worried about this blog.
    Breath in the fresh air.

    Sinc is just angling for a high level position in the next Shorten Government.

    Not a bad plan.

  10. The thing with Australia Post parcel post and similar is that they charge senders to have packages delivered to their door, but that never happens; the courier takes the parcel goes straight to the nearest post office and then you get a note saying that there’s a parcel to collect.

  11. Myrddin Seren

    Interesting comment on Whisperin’ Bob’s promo for Ahmed from behind the Paywall Curtain.

    From Trevor:

    This is rubbish Robert.

    The government should not be running a risky business in a highly contested and competitive market. We don’t need the Post parcels business. It should be sold off and arguably should never have been invested in.

    If governments are to run any businesses at all they should be to provide essential services that the private sector won’t invest in.

    Fahour should go. Does the head of DHL Australia get $5.6 million? I think you know the answer.

    And Fahour has a significant conflict with his 5% ownership and Chairmanship of a major packaging supplier to Australia Post.

    Uh huh.

  12. Megan

    He wasn’t a particularly outstanding leader at the NAB, given he was essentially moved to ‘special projects’ but at least he was not siphoning off taxpayers money to pay for the $7.3mill he was getting there. Plus a $13mill sign on bonus.

    Thank the heavens he did not get the Qantas CEO role he went for. They would be down to one flight a week and it would cost double what everyone else is charging.

  13. mundi

    As much as I am anti-government, this post is completely bizarre, and is more of a rant than having any real substance.

    Firstly, Post runs at a profit, with all money going to government. It does not receive tax payer funds or hand outs. It ran at a slight loss recently, but paid for it out of its own savings, and the loss seems to be temporary as it downsizes letters. Parcels are run at profit.

    Post is ‘winning’ because it has better customer density, which means it can deliver cheaper. Example: Post contracts out the last mile delivery of parcels on the open market, which is typically bid down to around $1 to $1.50. In contrast competitors see bids of only $5 to $10. The reason is that post can give smaller rounds with more parcels, so you can delivery one parcel every 1 or 2 minutes. Competitors have bigger areas with less parcels, meaning one parcel delivery every 5 to 20 minutes.

    Secondly, post has a big ball and chain around its legs: The union work force, the legislated letters (Which lose them hundreds of millions and would cut if they were privitised – they only deliver them because the regulation forces them to), and most of all: many free trade agreements require Post to deliver international parcels for free. This is why you can buy 99c free delivery items from China. China just dumps them at the airport (in china!) and Post has to get them here and deliver them, all for free, thanks to the politicians.

    So I can sort of see why the board think he is worth so much (the board was predicting a few years back that post would be running at a $300m to $500m per year loss by now, and requiring massive government payments like the ABC).

    However I still think its absurd to have a government buisness enterprise in the free market. Why? It also seems strange that Post were allowed to buy competitors like Star Track. Whats the ACCC have to say about that?

    I would love to know what the author things of the ABC. They get $1b from the tax payer,.

  14. Rabz

    As I pointed out in the comments section of Gottliebsen’s Oz piece, if AP are incapable of even placing a letter wholly within the correct letterbox, Fahour shouldn’t be “earning” anything.

    Fahour’s reaming of taxpayers is an absolute scandal and must not be allowed to disappear from view.

  15. mundi

    The big problem here is that the tax payers are essentially the shareholders, however they have no say over how profits are spent, or who is on the board. They have to constrain the CEO wages by voting. So if the CEO is over paid by a board filled with liberal appointees…. voters will have to vote Labor.

  16. M Ryutin

    Reading this I suppose I could get upset about poor old Toll. But I won’t.

    When you talk about “level playing fields” and “free markets” leave me out. As Judith (and numerous others overseas) point out time and time again, crony capitalism seems to be the prevailing rules here (and there). If Toll was a battling free-marketeer I could feel sorry for them, but as it is only another company whose “cronies” include their sweetheart-deal union partners and the use of union racketeers to damage their competitors

  17. Linden

    That’s is only for the ‘corporate post offices’ for 75% of all post office outlets are privately owned, Licensed Post Offices, if you really want to read some thing sensible about Aust Post from some one who is totally independent then I suggest you go to the website The lpogroup.com.au and look up the the Terry Ashcroft Newsletter, as far I am concerned it is the most interesting point of view I have read about Aust Post! Incidentally every post office business which has been sold ‘my vicinity’ of the last 8 years I would say every one of them accept for 2 I think has been taken over by Asians or folks of Indian decent, and the way some of them are run? I really don’t know how Aust Post lets them get away with it. One was so bad Aust Post actually closed it down and re-licensed it!

  18. Linden

    US Post has a $138 billion debt, Canada Post which runs on a 3 day a week delivery service has a $6.5billion debt, UK Post in similar position and most postal services across Europe in similar kind situations, all grappling the rapid change of technology. In Italy not so long ago, post card back to Oz cost $4.8o AUD

  19. Beachside

    mundi
    #2297634, posted on February 15, 2017 at 5:50 pm

    The big problem here is that the tax payers are essentially the shareholders, however they have no say over how profits are spent, or who is on the board. They have to constrain the CEO wages by voting. So if the CEO is over paid by a board filled with liberal appointees…. voters will have to vote Labor.

    Fahour was appointed during the Rudd experiment; Stephen Conroy was Rudd’s minister for communications.

  20. Linden

    Apparently StarTrack is running at a $50 million loss, (the Ashcroft Newsletter) anyhow it was half owned by Aust Post with Qantas, I think the idea was to let Star Track take over the entire mail ‘pick up’ get rid of those red mail vans and contract the whole area of the operation to ‘contractors’ As all the parcel delivery are contractors Aust Post and Star Track. Aust Post has also bought over 10% of shares in Aramex an international Express mail delivery service in Dubai, which it says will enhance its competitiveness in the international parcel business. I not barracking for Fahour just stating some of the things going on, that the like of Gottliebsen etc have not really considered.

  21. Rob

    The thing with Australia Post parcel post and similar is that they charge senders to have packages delivered to their door, but that never happens; the courier takes the parcel goes straight to the nearest post office and then you get a note saying that there’s a parcel to collect.

    Left out the other bits: you then have to wait for the post office to open and queue for ages even though there are only a few people in the shop. In doing so you probably had to take time off work and now regret buying anything delivered by Australia Post.

  22. Hasbeen

    I buy a moderate amount of stuff via the net. Many parcels are about 1M x 25cm x 20cm or a little bigger. These are coming from 800 to 1200 kilometres away or more.

    I usually choose Australia Post for these deliveries, as they offer the cheapest cost, & the fastest delivery. Credit where credit is due, the service is greatly improved. With that salary, so they should be.

    We have mail contractors out here, & ours is very helpful with both ordinary mail, & registered parcels. At the same time, the 2 couriers we usually have making deliveries are equally helpful.

  23. Anthony Park

    I think most readers of this blog would agree that services like AusPost should be privatised or its shares deposited into the future fund. A private board can set the salaries of the executive.

    However, AusPost recorded only one $220 million loss which I assume was covered out of past profits, so as far as I know, no injections of taxpayer monies. Even if there were, they would be covered by previous (and subsequent) dividends paid to the Federal Government.

  24. .

    Either privatise it and sell it off or if that’s not possible simply close it. Plenty of alternatives now, there’s no reason a all for any of Australia’s prominent monopolies, whether AusPost, Energex or the ABC to continue along existing on the public’s dime into the 21st century.

    Bang on.

  25. Rayvic

    The Australia Post board has lost track of what goes on in the real world. Australia Post’s return on assets is nothing to write home about. Consequently, there is no justification for paying such high salaries to the Australia Post CEO and board of directors

  26. Infidel Tiger

    Bob Gob is one of the more sensible business commentators too.

    Sad.

  27. Denise

    It may interest you to know that the reason why you are often left with a very quickly produced card is that the courier (Post ir Toll) is then paid twice : Once for the delivery and once to return items to the depot. I have been left cards in the past and the Courier hasn’t even bothered to ring the doorbell.

  28. win

    Well well well,Gottleibsen who in the dark days of Keatings purges small business tuned into ,bought the tapes etv.Just another fake .

  29. Up The Workers!

    Poor Ahmed Fahour – a lousy $5.6 million and everybody screams about it.

    The criminal former Federal President of the A.L.P., Mike Williamson, got $20 MILLION from the pockets of the low-paid members of the H.S.U. (the A.L.P.’s Help yourSelf Union) and was allowed by the Courts to KEEP every cent of it without him or Bill Shorten or Ged Kearney ever bothering to pay one cent of it back again.

    Maybe old ‘Ahmed The Postie’ might like to move over to the H.S.U. when Australia Post goes broke, as he could be on four times the remuneration!

  30. justin

    One of the absolute crackers in the argument about how good Ahmed is was that he asked Turnbull for government permission such that AusPost could charge more and deliver less and the government said yes and hey presto the losses went away. Now that takes the sort of CEO brilliance that only $5.6m can deliver. If only private sector companies could do that!!

  31. Mark

    Mundi’s comment at February 15, 2017 at 5:42 pm has great discussion points. Maybe these need addressing in an exchange over a few posts?

  32. Jim

    I think it is very unfair of you to single out Robert Gottliebsen as being a completely clueless business columnist. Most of them are completely clueless… Just like most of the economic commentators…

  33. Grandma

    I can only assume that neither Fahour nor Gottliebsen have tried to get Australia Post to deliver a parcel.

  34. B Shaw

    Small “express overnight” parcel from this capital city to a town three hours over the border
    took four days. Hate Australia Post.

  35. EB

    Gottliebsen must be friends with Fahour. Every time I read him these days he seems to be bleating on behalf of a mate. He seems to be Triguboff’s mouth piece on a regular basis.

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