>
Australia Post is planning its biggest overhaul of operations in more than 210 years that could increase the price of stamps and reduce the frequency of letter delivery.
The federal government shared its findings on Australia Post’s business model in a discussion paper on Thursday.
It found that Australia Post suffered a record pre-tax loss of $189.7 million on its letter delivery service. The Post is also expected to report its first full financial year loss in June for the first time in eight years.
While Australia Post delivered more than 500 million parcels in the last financial year, letter deliveries have been declining rapidly.
Letter deliveries peaked in 2007 and 2008 with the average Australian household receiving 8.5 letters a week. Now the average is only 2.4 letters per week.
Australia Post is considering changing its letter delivery service after a discussion paper found it to be financially unstable
The federal government expects the average to halve again in the next five years and fall to just one letter per week within 10 years.
The figures showed that invoices and bank statements accounted for almost 98 percent of the letters delivered.
“While traditional postal service usage is declining, Australians are increasingly relying on Australia Post’s nationwide parcel delivery services, which operate in a highly competitive market,” the discussion paper said.
To keep up with the changing delivery market, the document proposes to “reduce operating costs in the delivery of regulated postal services, freeing up delivery and processing resources to support parcel delivery.”
He recommends doing this by increasing the cost of sending a personal letter and reducing the frequency with which letter delivery services run.
Australia Post currently has more than 4,300 offices in Australia, including some 3,500 operated by small licensed businesses, and employs more than 60,000 people.
Finance Minister Katy Gallagher said the review would see how Australia Post locations across the country can remain viable in future.
“The government is committed to ensuring Australia Post continues to modernize to ensure it is financially sustainable and continues to provide employment opportunities and essential services to all Australians,” it said.
‘Australia Post has been a consistent driver of economic activity for businesses and consumers across Australia.’
The newspaper found that Australia Post’s letter delivery service is running at a huge loss, while its parcel delivery service is thriving.
Despite talk of modernisation, the government newspaper said Australia Post would remain in public hands, regardless of any changes made.
Communications Minister Michelle Rowland said the review would help Australia Post adapt to the changes.
“The consultation will ensure Australia Post maintains the long-term financial stability it needs to continue to support small businesses and deliver essential community services, particularly in our rural, regional and remote communities,” it said.
‘Australia Post is a valued national public institution providing invaluable services to Australian consumers and businesses.’
The union representing postal workers warned against diluting services at the expense of community needs.
Instead, he suggested Australia Post take on a new service and obtain a banking licence.
He said giving small post offices the ability to provide banking services would help regional and rural communities while renewing interest in postal services.
Australia Post is considering increasing the cost of posting a letter and reducing the frequency with which letter delivery services run.
“We also want Australia Post to gain a banking licence, which allows them to bring genuine local banking services to communities that are being underserved by the big banks,” said CWU National Chairman Shane Murphy.
“(It could) stimulate genuine competition in the sector at a time when the public is clamoring for it the most.”
He also recommended that the government could take advantage of the large number of offices to provide other government services, rather than leaving communities without service centers in long and frustrating phone lines.
Australia Post’s chief executive told a Senate hearing last month that rules requiring the postal service to deliver letters five days a week should be reviewed in light of falling numbers of letters.
The public consultation on the discussion paper will be open until April 27.