Aunty’s Spoiled Nephews and Nieces

ABC boss Michelle Guthrie is a whimsical lady. Last October she was  throwing comfort money at her minions — 2% p.a. compound pay rises for 2016-19, plus extra perks contrary to government guidelines. These included back-dated pay rises to July 1,  seven days “domestic violence leave” (huh?), and an extra fortnight on maternity leave (now 16 weeks) and two-to-four weeks partner leave.

But now she’s throwing between 150 and 200 management types out the door by July 1 to generate $50 million to spend on content-making.

That’s ta-ta to about 20% of ABC managers, with considerably more than 20% departing from “support areas”.

It’s high time the ABC’s make-work  management is culled. The ABC spends only half its budget on programs, compared with 80% plus spent by Sky News, for example.

But I’m a caring soul and my first reaction was human sympathy for those to be culled – their mortgages, their grocery bills, their repayments on the Prius and weekly direct debits to GetUp and the Climate Council.

But then I remembered something about the ABC’s uber-generous redundancy payout regime and my welfare concerns for these guys  evaporated.

The   2016-19 Enterprise Bargaining Agreement  says there’ll be a severance payment of four weeks’ pay for each of the first five years’ service, and then three weeks’ pay per year’s service up to a maximum of 24 years. So a 20-year manager would get a total 65 weeks pay.

In addition, there’s the issue of notice. Guthrie wants everything clinched by July 1, so she may well pay out the stipulated five-to-six weeks notice in cash. That would take our 20-year exec’s cheque to 70 weeks’ pay.

The redundancy calculator is unchanged from the ABC’s 2013-16 enterprise deal. The ABC’s union negotiators stuffed up by campaigning (successfully) for family violence leave in the EBA, instead of trying to improve the redundancy clauses. But maybe ABC staffers are plagued at home by spouse-bashers.

So what sort of screw are ABC management types on? We need that data to assess redundancy payouts. Naturally, the ABC is loathe to disclose. But in the case of the BBC, which might give us some guidance here, it is a simple exercise to discover individual managers’ pay. I’ll go into a little detail just to show how far out of line the ABC is with transparency and open governance. The BBC:

Listed below are staff whose salaries and remuneration are published quarterly by the BBC. In 2009 it was agreed with the BBC Trust that the BBC would publish the salaries, total remuneration, Declaration of Personal Interests, expenses, gifts and hospitality for all senior managers who have a full time equivalent salary £150,000 or more or who sit on a major divisional board.” [That’s about $A245,000 equivalent].

These BBC people are listed by name, about 140 of them. Just click the name and up comes the pay, the job description, the biography and most amazing of all, the expense claims and justifications thereof, along with gifts and hospitality accepted and outside roles accepted.

Here’s the first BBC chap on the list, Gavin Allen, Controller, Daily News Programmes.

Total remuneration: £144,500 ($A234,000) at September 30, 2016.

Mr Allen, despite his high pay and onerous responsibilities,[1]  always finds time to put in a  claim for the equivalent of a tram ticket. On March 3, 2016, for example, he successfully claimed a £3.10 train ride, and on March 24, he had a £4.10 “drink on flight” at the expense of BBC licence payers. His tiniest claim (Feb 25) was £2.8 for a taxi (it must have travelled all of 200 yards). But for half the month, his tummy was operating at subsistence levels – he put in 15 claims that quarter for ‘subsistence’ at about £9 a time, after having worked more than five hours, presumably in a state of meal-less famishment. As for gifts, Mr Allen lists in one quarter a dinner hosted by the Barclays chairman, another freebie dinner at the Garrick Club, and tickets to the soccer at Wembley.

The disclosures even extend to “personal interests” of managers, such as outside company roles, shareholdings and “external business interests or relationships with customers/suppliers/direct competitors of the BBC.”  It’s a wicked thought,  but in the ABC context such a clause might force disclosure of the lavish speaker fees ($5000-10,000 a time) showered on ABC talent like Tony Jones, Emma Alberici, Fran Kelly and Barrie Cassidy.

I then had a thought: surely the BBC isn’t disclosing all the intimate pay and expenses details about their very  Director General, Tony Hall? Yes indeedy, the BBC does just that! Apart from being paid £450,000, he claimed in the first quarter, 2016-17 items including a £7 train ticket, and £85 worth of whatever at the Sheraton,  Edinburgh. He takes very few gifts, but in April, 2015, accepted two tickets to a play, The Vote. He lists  close to 20 outside positions, including the House of Lords  and something called Go ON UK.[2]

So Go ON, Michelle Guthrie! Total disclosure is good enough for the BBC Director-General, let’s see you lead from the front at the ABC on manager pay and perks disclosure.

Perusing the 2016 ABC annual report rewards with only thin gruel. [3]

About 320 ABC types were all on higher than $145,000 pay. The ABC has 2856 “content makers” who are somehow looked after by 632 admin/professional helpers and no fewer than 325 “senior executives”.

We learn the bare names and titles of about 85 executives. Elsewhere the report provides the useless aggregate detail that 16 directors and officers got $4 million.

We once did get an indication of management pay from the ABC’s infamous own goal  when a staffer accidentally leaked a spreadsheet of top ABC pay in 2011-12 to Family First Senator Robert Brokenshire. Rikki Lambert, one of Brokenshire’s staffers, in turn leaked the data to The Australian in late 2013. The media’s focus then was on the ABC talent like Tony Jones ($356,000 in 20011-12) and the commercial types were ignored. So let’s take a look at a sample of them. Actually a high proportion of persons listed with those roles have since quit or retired from the ABC so I’ll delete the names.

Assuming a compound rate of increase of 2.5% p.a. for the following five years, the positions today would be paying 13% more.[4] This  list showed

• “Director ABC International”,  on $301,000 (adding 13%, $340,000).
• “Director Business Services”   on $260,000 ($294,000)
• “Director ABC Resources”   on $234,000 ($264,000)
• “General Manager Sales & Distribution” on $221,000 ($250,000)
• “Head Entertainment”   on $219,000 ($247,000)
• Director People and Learning, $255,000 ($288,000).

The median pay on the top 100 list was about $200,000, so let us use that figure for our redundancy doodling. In addition, we’ll assume the main ABC EBA applies, and that the person’s tenure at the ABC was (a) 10 years or (b) 20 years.

Applying our EBA formula, the redundancy payout is 35 weeks for a ten-year veteran, or $135,000; and for 20 years, $250,000. Plus, possibly, $20,000 in lieu of notice.

To further keep the wolf from the door, there’s the gorgeous super deals that ABC types wallow in. The most generous of the schemes involves an effective 20% annual contribution from our ABC, more than double the private-sector norm of 9.5 %.

The gold-plated schemes, closed off to new entrants in 2005, are the   defined-benefit schemes paying lifetime indexed pensions with reversion to spouse on death for the remainder of his or her lifetime. This generosity to the public service in general led to an abyss of a funding shortfall, hence ex-Treasurer Peter Costello’s Future Fund requiring $140 billion by 2020 to finance future payouts.

The ABC makes its own provision for the liabilities. Last year the ABC’s bill for straight salaries was $366 million. To this was added $34 million for the defined benefit liability and $33 million for the defined contribution liability. A defined-benefit employee would need to have at least a dozen years tenure, so a small number  of staffers seem to be racking up what represent very large liabilities.

From the government’s super ready reckoner, our $200,000 discharged exec, aged say 50 with 15 years service, goes out on a lifetime indexed pension of 18% ie., $36,000. On death the spouse continues the lifetime benefit, at the rate of $24,000 to $31,000 (67-85%).

The sacked guy or gal’s pension figures are supplemented by  a payout  based on his or her own contributions (5-10% of salary), plus an employer top-up of a 3% annual “productivity component” (don’t laugh!) for all CSS  super members, plus earnings.[5] That separate payout can involve combinations of  lump sum and non-indexed pension.

Despite super like that, ABC execs also enjoy the special tax breaks for government, non-profit and charity workers, via the ABC’s  flexible salary packaging arrangements.

The ABC directs its employees to  “Smart Salary”, which handles the ABC packaging. Inputting myself as a hypothetical $200,000 ABC person, I discover eligibility for a juicy array of tax-reduced goodies, including novated car leases, child care and airport lounge membership. Inputting $10,000 for child care and $510 for Qantas lounge, I find myself $4974 better off.  It’s a mystery why an ABCer deserves special tax benefits denied to private sector toilers.

As with all the public service, ABC enterprise bargains have lots of minor perks too, though even the ABC has nothing to equal the “DECA Day” leave provision at the Defence Department, “to enable an employee to be absent for a non-specified reason”.

I must say you’ve read a lot by now but aren’t much the wiser about payouts to axed ABC types. That  of course is how the ABC wants it.

Tony Thomas’s book of Quadrant essays, That’s Debatable – 60 Years in Print, is available here.