Australia Post is set to scrap daily letter deliveries to help reduce losses, with mail deliveries set to be made every second day to 98% of locations. Parcel deliveries will continue to be made daily.
The reforms were announced by the Federal Government’s Minister for Communications, Michelle Rowland MP, and Minister for Finance, Senator Katy Gallagher. The move is designed to help Australia Post boost productivity, increase its focus on parcels, and improve long-term financial sustainability.
According to the government, the new regulations are being introduced based on the results of a public consultation and co-designed workforce trials that looked to support more efficient letter delivery, while maintaining the jobs of postal workers. In Australia, letter volumes have reduced by two thirds since their peak in 2008, while parcels volumes have “boomed”, with Australia Post delivering around half a billion parcels in 2022-23. The average Australian household now receives just over two addressed letters per week.
To combat these challenges, Australia Post worked cooperatively with its workforce and the Communication Workers Union (CWU) to trial a new model for mail delivery at selected sites nationally. Australia Post intends to refine the model for a national rollout over the next 12 months. This national expansion requires amendment to the current Australian Postal Corporation (Performance Standards) Regulations 2019.
Informed by the public consultation and feedback from a discussion paper launched in March, the government plans to amend the existing delivery standards so that:
- Letter delivery frequency will be reduced to every second business day for 98% of locations, with parcels still delivered daily;
- To reflect the new delivery frequency, Australia Post will have an extra day to deliver regular letters across Australia; and
- Australia Post can change the way it manages priority mail, which now accounts for around 8% of addressed letters, so it can deliver services at a more commercial rate and work with customers to set appropriate terms and conditions.
The current geographic classification for Australia Post retail outlets will also be updated to reflect the modern Australian Statistical Standards Geography Standard Remoteness Areas, rather than the 1991 Census currently used. This is expected to have the net effect of reclassifying approximately 70 outlets to Remoteness Areas other than ‘Major Cities’.
Michelle Rowland MP said, “Australia Post is a publicly owned national institution cherished by millions of Australians. For decades, it has kept businesses operating, supported local communities and brought Australians together.
“However, Australia Post can’t stand still. Consumer and small business demands are changing, and Australia Post also needs to adapt. These new processes will mean Australia Post continues to deliver the high-quality letter service many Australians rely on, while also growing its booming parcel business for the benefit of consumers, small businesses and its hardworking staff.
“Australia Post belongs to all Australians. Modernizing Australia Post will put it on a surer footing so it can deliver the essential community services Australians need – including those in rural, regional and remote areas.”
Senator Katy Gallagher added, “In an environment where customers are sending fewer letters and more parcels, it is important that the business structure of Australia Post reflects the needs of the modern Australian consumer. The fiscal sustainability of Australia Post is vital to the government’s ongoing commitment to provide high-quality postal services to Australians.”
Paul Graham, CEO and managing director, Australia Post, commented, “Today is a significant day in Australia Post’s history. The reform roadmap announced today by the Minister for Communications, the Hon. Michelle Rowland MP, and the Minister for Finance, Senator the Hon. Katy Gallagher, is a crucial first step in the modernization of Australia Post.
“These reforms establish a platform for Australia Post to build a more sustainable business, while still providing secure employment for tens of thousands of posties and other team members, as we continue to deliver for our customers and the community every day. The reforms announced today support the significant progress we have made in delivering against our Post26 strategy.
“Given the significant decline in our letters business, we’ve worked closely with our team members and the CWU to trial new ways to deliver that are better for our posties. The changes to the frequency of letter delivery will enable us to focus on what matters most to Australians – fast and reliable parcel delivery with better tracking technology and quicker turnaround times for e-commerce.
“As e-commerce continues to boom and fewer and fewer Australians send letters, the changes to letters frequency announced today will free up our posties to also focus on parcels and packages. This will further turbocharge e-commerce in Australia.
“Urgent mail will still be delivered as it always has, and the reforms announced today do nothing to diminish our unwavering commitment to the service and support we provide across Australia. By allowing Australia Post to change the way it manages priority mail, which now accounts for only around 8% of addressed letters, it can deliver priority mail more sustainably.
“We will also continue to prioritize and protect vulnerable people, maintaining discount stamp pricing for pensioners and charities, while continuing to offer some of the lowest stamp prices in the developed world.
“Additionally, the government has agreed to update the outdated methodology used to classify our network in rural and remote Australia, which was based on the 1991 Census. The decision to use the most recent census data means it accurately reflects the significant population and geographic changes over the last 30 years.
“Importantly, today’s announcement recognizes we need greater flexibility to acknowledge the true cost of mail delivery. Today’s reforms provide us with additional scope to adjust our pricing when needed, while maintaining the checks and balances on stamp prices that Australians want.
“After decades of discussion and debate about modernizing Australia Post, we applaud the federal government for taking this important initial step to set us on the path to securing our future. We also welcome the support from our union partners and team members in delivering these historic reforms.
“While this reform package will provide some meaningful financial benefits over the next four years, we look forward to working with the federal government on further reforms to ensure we remain financially sustainable beyond 2026.”
Bob Chizzoniti, director, Post Office Agents Association Limited (POAAL), said, “Change is necessary to help Australia Post be financially sustainable in the years to come. We will scrutinize the proposed changes and make sure our members’ interests and concerns are heard. POAAL is seeking to better understand the potential impact of Australia Post’s new delivery model on LPOs in rural and remote areas, in particular LPOs (licensed post office) that accommodate mail contractors. There are also many LPOs that serve non-delivery areas, or areas that already have a two-day or three-day weekly mail delivery service. POAAL looks forward to discussing these aspects of letter delivery with Australia Post very soon.”