NBN becomes the home of fat cats

More than three-quarters of employees at the taxpayer-funded National Broadband Network are earning exorbitant six-figure salaries – including at least 850 paid more than $200,000 per year.

Fairfax has uncovered data revealing 110 NBN workers were being paid between $300,000 and $400,000 – with another 34 receiving even higher base salaries.

It’s also been revealed the taxpayer-funded organisation spent $265,000 on entertainment and function expenses between February and June:

The $51 billion taxpayer-funded organisation, under fire for paying bonuses to its executive team during the worst economic crisis since the Great Depression, has confirmed 110 of its workers are paid between $300,000 and $400,000 and 34 received base salaries above $400,000 before bonuses…

New figures, provided to a Senate committee, show that as of September 9 this year 4859 of its 6300 employees were paid in excess of $100,000 a year, including 733 workers on salaries worth between $200,000 and $300,000…

Labor’s government accountability spokeswoman Kimberley Kitching said NBN Co was the new “millionaires factory”.

“NBN Co employs public servants who take no private-sector risk, but are given multimillion-dollar rewards,” Senator Kitching said.

Why are they paid on top of already exorbitant salary packages? Obviously they are not related to the performance of the network.

This is the dark side of public-private partnerships. It’s a system of funding that finances the lifestyle of a privileged few. The benefits flow back and forth between those dispensing the government funding and those receiving it.

For those within the loop life is golden, while those outside (read the general taxpayer and end user) pick up the tab. In this case, we the tax payer have paid a fortune for a second rate NBN.

This privileged lifestyle goes way beyond the NBN and are shared by those fortunate to be recipients of government contractual arrangements, be they employment agencies, consultants, private security firms, construction firms, toll companies, to name but a few.

Unconventional Economist
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  1. Its good that the senator called it out. It may just be me but the senator also sounds a little jealous when she says “takes no private sector risks…”

  2. The NBN rankles because its not making Profits but in theory there isn’t anything wrong about salaries circa $200k. That doesn’t buy you much in any medium sized organisation. We have 200 staff and I reckon at least 15-20 are on over 200k.

    And some Labor class warrior – the “Milliionaires Factory” – no. No one earning a $300k PAYE wage is a millionaire. It might be a factory for million dollar mortgages but that’s about it.

    • Atleast one person on the blog gets it.

      $200K salary, if sole earner, will get $120K-130K in hand. For a family of three/four renting in Metro NSW with $130k in-hand salary, is OK (not comfortable not luxury) but if the same family has a mortgage then its literally ‘making-end-meet-lifestyle’ not even comfortable.

      BTW, Metro Sydney $150K salary does not buy you much talent you can get warm-bodies but no talent. If you want bare-min talent, need to up $200K. The real war-horses are earning $360K PA. I am not talking about mid-level managers/executives who ‘sit-and-plan-and-meet’ I am only talking about work-horses.

      • Strange how none of these supposedly commonplace salaries are represented in salary surveys or job ads.

      • The two floors of NBN office space in my building seem to be packed with listeners to SBS Punjabi. Not sure if they are coining it, though.

        • Exactly. NBN hires mostly foreigners! Even the HR woman is a foreigner!

          We need to reserve 50% of the NBN jobs for Aussies.

  3. happy valleyMEMBER

    Just another of the sheltered workshops operated by a conga line of federal gubmints – the RBA, APRA, ASIC and so the list goes on and on and on?

  4. In some countries there are laws that stipulate any civil servant, or anyone who is employed by a government-owned entity, cannot get a wage higher than an MP of that country/state, by definition.

    I think AU needs a similar law. It’s complete nonsense talent cannot be attained without offering more than an MP’s wage. And if prospective employees desperately want to earn more (funded by the tax payer), they shouldn’t aspire for the public interest at all.

    • This will only result in MP’s salaries rising to meet the “market rate” – all for drinking beer and falling asleep in the chamber

      • Maybe, but at least the accountability principle is more obvious this way.
        Another proposal – MP salaries cannot be higher than 2 * median wage. What do you think of that?

    • whale – the issue is Labor set up the NBN as a private company owned by govt to keep it off the budget books. these guys aren’t technically public servants on the Public Sector pay scales. I agree its a bit of rort. NSW Treasury Corporation (and iCare come to think of it) use the same sleight of hand to pay the effective public servants higher than PS rates.

      • Yes, that is why such a law should include Gov AND any Government owned entity (at least 50% ownership), so these ‘private’ but publicly owned companies are bound to the same wage ceilings, and can’t get around it. It’s a simple rule to implement really, there are countries doing this quite effectively.

        • Private industry salaries are implicitly capped by capping govt salaries. Public servants simply become jealous and impose restrictions. This happens overseas (Denmark is one example I think?).

      • a maximum of AUD 500k for employees of Gov and state-owned entities is way, way to generous here. Remember, these are no-risk jobs, completely tax-payer funded. In my humble opinion AUD 150k is more than enough as a wage cap.

        If you would present the 500k as a cap in a referendum it would certainly be voted down.

    • It’s complete nonsense talent cannot be attained without offering more than an MP’s wage.

      Being an MP requires no formal qualifications or minimum level of experience and carries pretty much zero personal risk, and performance reviews only happen every four years.

      You wouldn’t need too much talent to be “worth” more.

  5. so much I want to say but I can’t. You are very much on the money and more right than you think.

  6. Scomo's Scrotum

    When NBNco was started up, they deliberately paid above market to attract top talent from the telcos and IT. This was the only way they had a chance of meeting their rollout goals (before the network was nobbled by Abbott and Turnbull), and not an uncommon strategy for a well-funded start-up. The premium was particularly necessary because these people were smart enough to know that their employment at NBN would be time-limited, with massive cutbacks once deployment was complete and “job done”.

    The NBN is second-rate because the Liberals purposely made it that way. They hated it because it was a Labor initiative, and cripped it to protect their mates at Telstra, Foxtel, etc. from Netflix and other newcomers. Now that old media has finally come around to providing streaming services and NBNco has paid Telstra billions for their absolutely useless, failing copper network, the Coalition has decided to do the job they should have done in the first place, and (sort of, kind of, almost) finish the network that Labor proposed in 2007.

    The network doesn’t suck because of the employees or the work they did, the network sucks because of government policy. And the reason that “more than 3/4” of employees are on over $100k (aside from the fact that that’s the going rate for anyone with half a clue in the industry) is because all of the lower wage roles have been casualised or contracted out since day dot. The bloke pulling fiber through an asbestos-filled pit isn’t on $100k, that’s for sure.

  7. Your standards are slipping Leigh. Did you do any research in writing this? NBN is in the business of engineering, project management and telecommunications – we can argue how well they do that on another day and I won’t disagree with you but to staff their organisation you won’t do it by paying people less than $100,000 your so called six figure salary! Get a distribution of Telstra or similar entity’s salary profile and compare that. Buying into Kimberley’s emotive language doesn’t help anyone.

  8. Since when is $200k a lot of money living in this country of world beating house prices, insurance, energy costs and childcare expenses ? You’ve got to be kidding.

    • Since the median AU full-time annual wage is AUD 57,200, my position would that yes, indeed almost 4 times that amount would qualify as a lot of money.

      If you can’t manage your budget on AUD 200k, you urgently need a month’s holiday in Africa for some perspective.

      • Jumping jack flash

        200k would maybe be just enough to leverage 2mil which would probably be just enough for an average house in a leafy suburb or middle ring near a slightly above average school.

        Might be wrong though. Maybe not quite as good as im thinking.

        57k? Pfft. Get out of town.

        Dont worry though, im sure theres plenty of Quiet Australians who are able to work for 57k…

      • Hardly a useful metric. We are not comparing “median” jobs. Average salary in Aus. is close to $90k.

      • NBN Co is competing for talent on a global scale. I’m in Silicon Valley and work for a large technology company… last year I pulled over AUD300k base+bonus (equity was worth almost as much at current price) and I’m just an average-ranked senior software engineer.

  9. kiwikarynMEMBER

    Even 10 years ago I wouldnt even have looked at a job at the NBN for less than $150k a year. In fact, it took $1200 a day to get me out of bed LOL.