NBN Co says it was protecting staff morale in caretaker breach

NBN Co has defended itself after the secretary of Prime Minister and Cabinet, Martin Parkinson, found that its chairman, Ziggy Switkowski, breached the pre-election caretaker conventions - despite a prior warning.

NBN Co says it acted to protect employee morale and restore their trust.

Parkinson, asked by opposition frontbencher Tony Burke to examine an opinion piece written by Switkowski after police raids on Labor in relation to leaked NBN documents, found some comments in it were “not consistent” with the conventions.

The article said that contrary to media reports the documents “did nothing to highlight poor management of the business. There are no ‘cost blowouts’ or ‘rollout delays’ to the publicly released plans.” Switkowski strongly defended NBN Co’s performance and denied the “theft” was the action of whistleblowers. He said none of the matters in the documents had been raised through the channel for whistleblowing. NBN Co called in the police over the leak of the documents.

In his letter to Parkinson, Burke said that in writing the opinion piece, which appeared in Fairfax Media, “Dr Switkowski has used his role as chairman of NBN Co to run a contestable script to the specific advantage of the prime minister and the Liberal Party”.

Burke noted the Government Business Enterprise Governance and Oversight Guidelines said these bodies must “avoid activities that could give rise to questions about their political impartiality”. The caretaker conventions provided that government companies “should observe the conventions and practices unless to do so would conflict with their legal obligations or compelling organisational requirements”.

Parkinson, who has conveyed his view to Switkowski, said in his reply to Burke that the conventions were aimed at protecting the apolitical nature of these bodies and preventing controversies around their role distracting from the substantive issues in the election campaign.

He said NBN Co had submitted an advance draft of the article to the communications department. That department had received advice from the prime minister’s department that the article in that form was not consistent with the caretaker conventions.

That view had been “strongly conveyed” to NBN Co by the communications department, “as was the view that the conventions apply to the chairman, as well as to the CEO and the company,” Parkinson wrote. “Our understanding is that this view was passed to Dr Switkowski.”

The conventions do not have legal force, Parkinson pointed out.

NBN Co’s executive general manager of corporate affairs, Karina Keisler, said building the NBN was an “unprecedented task” that could “only be achieved with a highly engaged and motivated staff”. The opinion piece had “addressed misleading claims to restore the trust of its 5000 employees”.

“Inaccurate comments that accuse the company of deliberately misleading, deliberately concealing, and then persecuting innocent whistleblowers have a tremendously corrosive effect on morale and jeopardise the great gains made over the last few years,” she said.

“Any accusation that the company’s staff, management, its board and (by implication) its shareholder departments have conspired to keep large cost increases secret from the Australian people is not only plainly and demonstrably false, but is a serious accusation in light of the Corporations Act (for example Section 184),” she said.

“This is obviously not acceptable and the opinion piece addressed the allegations in a manner commensurate with the mode in which they were made – that is, publicly in the national media.”

Bill Shorten said “for an otherwise respected businessman, Dr Switkowski, I think this is a shameful breach”.