NBN Co will need to demonstrate that the targets it sets for bonus payments to executives represent actual performance, under a review brought on by the new Labor government.
Communications minister, Michelle Rowland, said NBN Co targets would be considered as part of the review of government-owned business bonuses initiated under the Albanese government, which also includes Australia Post.
“Bonuses need to be linked to performance. And I don’t think that that is an unreasonable expectation of taxpayers, particularly during challenging economic times,” she said in a wide-ranging interview.
“For most Australians, I also think that principles of contextual restraint need to be exercised, whether it be in relation to NBN or Australia Post … Value for money and bonuses should be linked to performance. What we’ve been talking about in a lot of these instances, they are already highly remunerated executives.”
In 2021 Rowland, then shadow communications minister, and the late Labor senator Kimberly Kitching wrote to the auditor general about $78m in bonuses paid by NBN Co in 2020, suggesting NBN Co “might have an incentive to set and surpass artificially low targets to create the impression that an over-budget project is beating performance metrics”. When the targets are beaten, taxpayer-funded bonuses are paid to the company’s executives.
Following performance bonus guidance developed by the former government, NBN Co in November ditched most short-term incentive payments in exchange for payrises that on average amounted to 64% of the bonus payments. Short-term incentive bonuses for the most senior executives in the company were retained.
As the shareholder minister for NBN Co, Rowland speaks highly of the work being undertaken by the company.
“I’ve noted how committed the organisation is and its purpose. And they appear to be very driven by principles that are consistent with the government’s – and that’s about driving productivity, making sure that Australians stay connected, so there is a sense of mission that I see there,” she said.
Labor has promised to adopt the $2.9bn NBN expansion plans pledged by the Morrison government to upgrade wireless and offer full fibre upgrades to 2m premises. It also promised to go one step further and upgrade an additional 1.5m homes for a further $2.4bn.
Rowland said those additions are now under active consideration and the government is committed to keeping its election promises. The minister noted that the debt taken on by the former Coalition government, along with rising interest rates, would present a challenge for the project.
“We’re inheriting an NBN that’s carrying $27bn in debt, that’s larger than what it needs to be. But the view I take, having been briefed on a number of these matters, is that we are where we are,” she said.
“Yes, they are going to be more sensitive to interest rates, then if that debt has to be lower. That’s just a fact. The cost needs to be managed.”
Rowland said the government would honour the grants awarded under the Regional Connectivity program by the former government – under which a business in former deputy prime minister Barnaby Joyce’s electorate was granted a $520,000 fibre link – but did not say what the future of the program would be.
The government will wait for a review of the News Media Bargaining Code to be provided in September before announcing any potential changes. Rowland noted, however, that Meta’s continued refusal to negotiate with SBS and the Conversation over payments for news articles, which the code facilitates, would be part of the review.
The minister also indicated no significant changes to the former government’s policy on the Online Safety Act, with the new powers given to the eSafety commissioner to target online bullying, stating it was too early to review its delivery.
