Australia Posts proposes postal services modernisation

Australia Post this week revealed a record first-half letters loss of $189.7 million. The company stated that this reflected a wider issue with our postal system. Michelle Rowland, the Communications Minister has ordered a review to consider scaling back letter delivery and focus on parcels, with the federal government releasing a discussion paper on the topic. The discussion paper, titled Postal Services Modernisation labels the current postal regulatory framework “inflexible”.

The CEO of Australia Post Paul Graham urged people to make a submission about what postal services they want.

“Australia Post’s Letters business has been in an unstoppable decline since 2008 and the 214-year-old postal service faces an uncertain future as fewer people send letters and consumers increasingly embrace digital services,” he said.

According to the report, letter volumes declined 66 percent since they peaked in 2007-08. Currently, according to regulation, Australia Post must service daily (except on a Saturday, a Sunday or a public holiday in the place where the delivery point is located), 98 percent of all delivery points; and at least 2 days each week for 99.7 percent of all delivery points.

“It is clear the status quo for Australia Post is no longer an option,” Mr Graham said.

“The business is on a path towards significant losses that, without change, will have to be covered by the Australian taxpayer and that is money that could be better spent on schools, hospitals and roads.”

Australia Post is projecting growing losses over the next decade. In its half year results, Australia Post reported a significant deterioration in its financial position, and is reportedly set to deliver a full financial year loss in 2022-23, the first annual loss since 2015.

Outlined in the report, parcel delivery services operate in a highly competitive market. Domestic parcel volumes have increased significantly over recent years, and 1 in 5 retail sales are now done online.

According to The Guardian, nearly 70 percent of business-to-consumer parcels went through Australia Post’s networks. But with so many resources tied up in the letters business, expansion in the e-commerce and parcel business is limited, according to Australia Post.

The review will accept submissions from the public until 27 April.

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