Regulation of Australia Post

Posted: January 27, 2015 at 4:35 pm

It has been reported that the Federal Government will soon consider proposals to deregulate Australia Post.

Deregulation would probably mean that Australia Post would be able to set the price of the basic rate of postage without seeking approval from the ACCC. Last year there were reports that Australia Post plans to apply for an increase of the BPR (basic postage rate) from 70c to $1. In a deregulated postal environment, Australia Post could increase postage prices at will without the ACCC’s review.

Australia Post has recently stated that it “supports a regulatory model that will enable [it] to offer more choice on product speed and recover more of [its] costs.”

The Federal Government is reported to be intent on introducing its “e-government” initiatives soon, which will deliver government services online, resulting in a further drop in letter volumes and less revenue to Australia Post. Reports suggest that the rush to implement e-government has triggered calls for Australia Post to be deregulated.

Without doubt, e-government will damage Australia Post’s revenues and the revenues of LPOs. Licensees want to see proposals from Australia Post – and from the Government – that will grow Australia Post’s business. Licensees need this assurance from the Government since they have invested financially in the Australia Post network.

There is a need to reform the basic letter service. Without reform the losses in the letters business will become unsustainable. Australia Post has repeatedly stated that the letters business is losing money.

Changes and improvements to communications and technology are forcing Australia Post to look for efficiencies in its mail delivery network. POAAL will be eagle-eyed in looking out for the interests of Licensees and Contractors if and when any “efficiencies” are put forward.

Australia Post has proposed moving to a two-speed letter service – essentially “first class” and “second class” mail. POAAL is not convinced that moving to a two-speed letter delivery service will rescue the letters business. Australia Post has yet to provide information on how such a proposal might affect LPOs.

POAAL has repeatedly stated that there is still value in the mail. Letters are not subject to the trust issues that affect email.

Promotional messages are being aggressively filtered out by email platforms. Spam and phishing emails are abundant.

Direct marketing via the post remains an effective tool for businesses to reach new and existing customers.

POAAL has also repeatedly stated that it is in Licensees’ best interests for Australia Post to be in sound financial health. If Australia Post starts to record losses, this could diminish its ability to invest in new technology and in infrastructure to remain competitive in markets such as parcels, banking, trusted services and bill payments.

If Australia Post consistently returns a loss, then pressure will grow for Australia Post to be privatised in line with the recommendation from the National Committee of Audit’s report.

While the post office network may have been founded on letter delivery, its future lies in having diversified income sources with potential for growth.

Any decisions Australia Post may make concerning the letters service must take into account the long-term needs of LPOs and their customers, in particular those in rural and remote areas.

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