Australia Post (AusPost) has welcomed the government’s decision to launch a public consultation on the modernization of postal services.
All Australians will have an opportunity to provide their views on how Australia Post operates and how it services its customers and the community. The consultation comes as more consumers embrace online rather than over-the-counter services and the use of letters continues to rapidly decline.
Paul Graham, group CEO and managing director of AusPost, said, “This is a positive first step and we strongly support the discussion paper and consultation process. A discussion on modernizing postal services and Australia Post is the conversation the Australian community needs to have. 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.
“Australia Post plays a critical role in the lives of all Australians, as a key enabler of the economy and a touchstone of communities, particularly in rural, regional and remote areas. We connect people kept apart by distance, provide support for businesses and access to important financial, identity and government services for customers.
“A modernized and financially sustainable Australia Post will be able to continue to invest in new products and services that meet the evolving needs of customers and communities, while continuing to meet our significant service obligations to the Australian community, particularly in regional and remote areas.”
Over the past three financial years, Australia Post has invested more than AU$1bn (US$674m) to meet the changing service needs of the community. This includes opening eight new parcel processing facilities in FY22, over half of which are in regional Australia. The company has also continued to invest in green transportation with Australia’s largest fleet of electric delivery vehicles. It has also delivered AU$750m (US$505m) in efficiencies to help make the business more financially sustainable.
Despite these investments, the losses in Australia Post’s letters business continue to undermine the long-term viability of the business. Letter volumes have decreased by two-thirds since 2008 while delivery costs have increased significantly.
“It is clear the status quo for Australia Post is no longer an option. The business is on a path toward 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,” Graham said.
In FY22, Australia Post delivered 3.1 billion fewer letters than in FY08 and it is forecast that Australian households will receive less than one letter per week by the end of the decade.
“We have a distinct two-speed business, with our letters business weighing heavily on our e-commerce-driven parcels business and other services,” Graham said. “The growth in our parcels business is now leveling off as multinational competitors expand into the Australian e-commerce market – and if we don’t address our letter losses, it will begin to materially impact Australia Post’s ability to service the community.
“Added to this picture is the rapidly changing preference for digital and cashless services, which is significantly impacting our network of post offices. Last financial year, our post offices conducted nine million fewer transactions than the year before – and 22 million fewer than in 2019.
“Australia Post looks forward to working with the federal government throughout the consultation and outlining the significant benefits to the Australian community from a modernized and financially viable Australia Post.
“As a self-funded government business enterprise, we remain focused on strengthening the business so we can continue delivering and delighting our customers and the community, and this means adapting to meet the challenges facing us.”
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