Wednesday, 26 October 2011 17:16

NBN Co is "Millionaires' Factory" of overpaid staff: Fletcher


Paul Fletcher, the Federal Opposition's NBN head kicker in residence is at it again, this time lambasting NBN Co, the company administering the National Broadband Network, for paying its employees the sort of excessive salaries enjoyed by staff at top investment banks.


Please note that NBN Co disputes the average salary figures used by Mr Fletcher in this story as they were based on incorrect data. See our follow up article.

According to Mr Fletcher, a former senior executive at Optus before his assumed his current role as the Liberal MP for Bradfield, NBN Co staff on average get paid more than double the average employee at major corporations.

Only at high flying investment banks, like Macquarie Bank, do staff get paid the sort of money that NBN Co pays its employees, Mr Fletcher says in his latest missive:

"NBN Co's average staff costs per employee of approximately $224,000 are more than double those of Telstra ($101,000) and of Westpac ($105,000).

"In fact, to find staff costs comparable to NBN Co you have to go to Macquarie Bank - popularly known as the 'Millionaires' Factory' - where average staff costs are approximately $254,000.

"When you compare NBN Co's staff costs - revealed in its recently released annual report - with the staff costs of comparable Australian companies, the disparities are extraordinary," said Mr Fletcher.

"How can NBN Co justify average pay levels so much higher than companies like Telstra and Westpac?

"One thing is clear - it cannot be justified based on performance. NBN finished the 2010-11 financial year with less than 2,000 active services and reported a loss for the year of $323 million. By contrast, Telstra delivered over eight million fixed and twelve million mobile services and its annual profit exceeded three billion dollars.

"If a private sector investment bank like Macquarie can operate a successful business and offer very high pay levels, good luck to it. Like Telstra and Westpac, Macquarie has a proven track record of generating financial returns for its shareholders.

"There is no such justification for NBN Co.  Its lavish pay levels are being funded with taxpayers' money," Mr Fletcher concluded.

Mr Fletcher, however, did not acknowledge that all capital intensive start up enterprises like NBN Co would be expected to make significant losses in their early years of operations. Neither did he mention that the early employees of such enterprises were usually senior managers at the higher end of the staff food chain.









Total Staff Expenses $ m

Staff    (average headcount)

Staff Expenses per Employee

Annual Report reference

Macquarie Bank FY 2011




Page 87, "Total employment expenses" and "Average staff headcount"

NBN Co FY 2011




Page 16; page 59, "Employment costs"

Westpac FY 2010




Page 87, "Salaries and other staff expenses"; page 120, "Total employees"

Telstra FY 2011




Page  23, "Labor" and "Full time employees and employed equivalents"








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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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