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NSW Government collects $28.1m dividend from Essential Energy as management slashes 600 jobs

Paul Lister - Thursday, December 08, 2016

Analysis of the annual reports of publicly-owned regional electricity distributor Essential Energy has revealed the NSW Government took $28.1 million in dividend payments from the company during the same period management was arguing the company needed to slash 600 jobs to remain profitable.

Essential Energy management told the Fair Work Commission it required permission to forcibly axe 600 jobs to remain profitable, yet the company’s financial reports reveal an operating loss of $1.2 million was only recorded after accounting for the $28.1 million dividend payments to the NSW Government.

The documents also show a dividend payment of $58.7 million was provided to the NSW Government during the previous 2014-15 financial year.

Senior managers enjoyed substantial pay rises over the past year while frontline workers have faced an uncertain future, with acting Chief Executive Officer Gary Humphreys having his total remuneration jump 40.3 per cent to $764,353 in the 2015-16 financial year.

Meanwhile, head of Customer and Corporate Services Caroline Hungerford pocketed a 7.8 per cent pay rise to $337,706, the salary for the Chief Financial Officer position jump by 5.7 per cent to $357,876, and Safety, HR and Environment chief David Nardi took away a 4.4 per cent pay rise, with a package of $331,250.

The Electrical Trades Union, which carried out the analysis, said the company’s annual reports also confirmed that since the Liberal National Coalition came to power in 2011, job numbers at the state’s largest regional employer had been reduced from 4600 to 3200, while the number of Essential Energy locations had been cut by nearly a third, from 147 in 2011 to 100 in 2016 (see table over page).

“Essential Energy management stood before the Fair Work Commission and argued that to remain profitable the company needed to slash up to 1,600 regional jobs,” ETU deputy secretary Dave McKinley

“What they didn’t tell the industrial umpire, or the people of regional NSW, was that this was only the case because the NSW Government has been continuing to demand multi-million dollar dividends.

“Had this dividend not been paid, Essential Energy would have produced a $27 million profit last financial year — enough to fund the jobs of about half of those who are now being axed.

“The year before, that figure was more than double that amount, with the dividend payment enough to cover the wages of every single regional worker who is now being forced out the door.”

The company’s annual report concluded that financial outcomes had actually been better than expected, stating that this was the result of: “lower than budgeted (number of) employee’s during the year.”

“The fat of the matter is that these regional jobs could be saved by the NSW Government, but their addiction to dividends from this publicly owned utility is preventing that from happening,” Mr McKinley said.

“If the NSW Government returned these dividend payments, the company would be able to save hundreds of regional jobs.”