Thursday, 27 October 2011 11:04

War of words between NBN Co and Paul Fletcher over salaries

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A war of words has broken out between former Optus executive turned Liberal MP Paul Fletcher and NBN Co over the average salaries paid to NBN Co staff. Mr Fletcher has described NBN Co as a "Millionaires Factory" with staff getting paid an average of more than $220,000 during 2010/2011. NBN Co claims Mr Fletcher has got his sums wrong and in effect ignored certain facts.

 

As a result of two iTWire stories last night - one from a Paul Fletcher release and the other from a rebuttal interview with NBN Co spokesman Andrew Sholl - Mr Fletcher has contacted iTWire and issued another release to restate that his original findings about NBN Co are correct.

"NBN Co last night sought to respond to analysis of its average staff costs by misstating its own headcount numbers at the end of the 2009/10 financial year," said Mr Fletcher, Federal Member for Bradfield.

"Yesterday, I released data showing that NBN Co's average staff costs per employee, at approximately $224,000, were more than double those of Telstra and Westpac and comparable to those of Macquarie Bank (approximately $254,000.)

"These calculations used the standard methodology of calculating an average headcount for the year based on start of year headcount and end of year headcount.

"The same methodology was used in calculating the comparable figures for Macquarie Bank, Telstra and Westpac.

"IT Wire (sic) quotes a spokesman for NBN Co as saying last night that I had divided the 2010/11 staff costs by the 2009/10 headcount of 531, and the appropriate calculation would be to divide it by the closing headcount for 2010/11 of 855.

"The spokesman is wrong on three counts.

"First, he is wrong about NBN Co"s 2009/10 headcount.  It had 207 employees at the end of 2009/10 - not 531 - as its Annual Report states on page 16.

"Secondly, he is wrong about which figure was used to divide staff costs by - it was average head count for 2010/11, not closing headcount for 2009/10.

"Thirdly, he is wrong about the correct methodology to use for calculating average staff costs.

"To use end of year headcount as he proposes is incorrect, because this includes people who may have only joined the organisation a month or two before the end of the financial year, and hence a full year"s worth of salary and on-costs (including such costs as superannuation and training referred to by NBN Co's spokesman last night) is not included in the employment costs figure of approximately $119 million."

However, there are still the issues of NBN Co being a new company which is top heavy with senior personnel and fast growing staff numbers which grew by more than 400% in the past financial year. Mr Sholl of NBN Co made the point yesterday that mature companies like Telstra have thousands of relatively lower paid non managerial workers on their books unlike NBN Co.

NBN Co has issued a response to this latest release from Mr Fletcher:

"Bottom line: It's hardly valid to compare a start up to established banks and utilities with tens of thousands of employees.

"Nevertheless, whichever way you cut the numbers average staff costs at NBN Co are nowhere near the figure being suggested."

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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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