Major changes coming to Australia Post

Australia Post is planning its biggest overhaul of operations in more than 210 years with stamps set to cost more and delivery frequency to be reduced.

The federal government shared its findings on Australia Post’s business model in a discussion paper on Thursday.

It found Australia Post suffered a record-breaking before tax loss of $189.7million on its letter delivery service.

While Australia Post delivered more than 500million parcels in the past financial year, letter deliveries have been rapidly falling.

Letter deliveries peaked in 2007 and 2008 with the average Australia home receiving 8.5 letters a week. Now the average is just 2.4 letters per week.

Australia Post is considering changing its letter delivery service after a discussion paper found it’s financially unstable

The discussion paper said the number is expected to halve again in just the next five years.

‘While traditional postal services usage declines, Australians are increasingly relying on Australia Post’s nationwide parcel delivery services, which operate in a highly competitive market,’ the discussion paper said.

It proposes  ‘reducing operating cost in delivering regulated letter services, freeing up delivery and processing resources to support parcels delivery’. 

Finance Minister Katy Gallagher said the review would see how Australia Post locations across the country would be able to operate successfully into the future.

‘The government is committed to ensuring that Australia Post continues to modernise to ensure that it is financially sustainable and continues to provide employment opportunities and deliver essential services to all Australians,’ she said.

‘Australia Post has been a constant driver of economic activity for businesses and consumers across Australia.’

The paper found Australia Post’s letter delivery service is running at a huge loss while its parcel delivery service is thriving

Earlier this year, the postal service reported a first-half loss of $189 million, with Australia Post set to report its first annual loss since 2015.

Despite the talk of modernisation, the paper said Australia Post would remain in public hands, regardless of the changes made.

Communications Minister Michelle Rowland said the review would help Australia Post adapt to changes.

‘The consultation … will ensure Australia Post maintains the long-term financial stability it needs to continue supporting small businesses and providing essential community services – particularly in our rural, regional and remote communities,’ she said.

‘Australia Post is a cherished national publicly owned institution that provides invaluable services to Australian consumers and businesses.’

The union representing postal workers warned against watering down services at the expense of community needs and suggested Australia Post be granted a banking licence.

‘We also want to see Australia Post secure a banking licence, allowing them to bring back genuine local banking services to communities that are being neglected by the big banks, and to stimulate genuine competition in the sector at a time the public are crying out for it most,’ CWU National President Shane Murphy said.

Australia Post is considering increasing the cost of posting a letter and reducing how often letter delivery services run

Governments should also take advantage of its vast network and retail footprint to deliver services, rather than leaving the public in long and frustrating telephone queues.

The chief executive of Australia Post told a Senate estimates hearing last month that rules requiring the postal service to deliver letters five days a week should be reviewed in light of falling letter numbers.

Figures showed bills and bank statements made up nearly 98 per cent of letters delivered.

Public consultation on the discussion paper will be open until April 27.