Bloomberg News

Queensland Seeks to Freeze Bonuses at State-Owned Rail Operator

July 26, 2012

Queensland, Australia’s third-most populous state, will seek to freeze bonuses paid to employees of the government-owned rail network operator after service reliability fell to a three-year low.

Queensland Rail paid as many as 1,337 bonuses worth a total of A$4.8 million ($5 million) in the 2011 financial year, Transport and Main Roads Minister Scott Emerson said in a e- mailed statement today. Extra payments will only be made when they are required by contracts, he said.

Liberal National Party leader Campbell Newman won office in March, ending Labor’s 14 years in power, with promises to cut spending and restore the state’s AAA credit rating. Queensland’s worsening financial performance is a concern that may hurt its Aa1 rating and greater budgetary efforts are needed, Moody’s Investors Service said in its annual report on the Australian state in February.

“A$4.8 million is not an acceptable level, particularly when there is declining patronage and reliability reached a three-year low,” Emerson said. “I think most people would take a dim view of bonuses at a time when we are making hard decisions.”

The bonus decision followed the state government’s order last month for Queensland Rail to refocus its business on the delivery of “frontline” service, the minister said.

In the past two years, the rail operator has increased staff levels in communication and marketing by 68 percent while strategy and corporate services has expanded its workers by 66 percent, according to the statement.

To contact the reporters on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net; Tim Smith in Sydney at tsmith58@bloomberg.net

To contact the editors responsible for this story: Frank Longid at flongid@bloomberg.net; Edward Johnson at ejohnson28@bloomberg.net


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