Inside the Australia Post warehouse in Mitchell. Photo: James Coleman.
Letters and postage stamps could soon be a thing of the past, with traditional mail usage declining and drastic measures being considered to save the viability of Australia Post.
That was the cut-through message delivered by Australia Post CEO Paul Graham on 27 April.
His plea for government intervention came via a speech to an American Chamber of Commerce in Australia (AmCham) event in Melbourne.
It was delivered shortly before consultation closed on a discussion paper for the government business enterprise’s future.
Mr Graham said while the consultation will help to inform decisions over what measures are needed to save Australia Post, holding continual reviews into the postal service was not the answer.
“There have been more than 11 reviews of Australia Post over the past 10 years,” he said. “We do not need any more to repeat the same fundamental message – that the status quo is no longer an option for our business.
“What we need is the commitment and goodwill from the parliament to make the changes necessary to deliver a sustainable future.
Mr Graham said that parliamentarians may be asked later this year to consider changes to Australia Post to ensure the business remains viable, but implored them to “put the national interest first”.
Postal services are very much at risk, he said, as is the long-term viability of the organisation tasked with delivering them.
Australia Post’s letters business is expected to record a loss this year, after making a loss of $189 million in the first half of the financial year. However, Mr Graham says the Australian community is not aware of the condition of its national postal service.
“Our extensive research shows that just one in 10 Australians are aware that we are no longer profitable.
“It’s a stark message but the Australian community must understand that without change to their national postal service, its long-term viability is at risk.”
Traditional mail volume has changed significantly in recent years, with varying alternative delivery methods being increasingly embraced by the public.
Couriers, parcel lockers and electronic communication have shrunk household mail usage.
The CEO said it had all added up to a declining profitability for Australia Post.
“Ever since the global financial crisis our traditional business model has been eroding and the deterioration in our outlook is gathering pace,” Mr Graham said.
“Until the year 2000, mail volumes tracked the economy, growing at around the same rate as gross domestic product, but after Y2K mail volumes began to flatline.
“Then, during the GFC, mail volumes fell by 5 per cent and they have been falling ever since.”
Since 2007-08 mail volumes have fallen by 66 per cent, he said, and per-household mail volumes are expected to halve in the next five years.
Australia Post is spending more money than ever before to deliver fewer letters than ever before.
The average household today receives fewer than two letters per week.
Mr Graham insisted that legislative changes are necessary to keep Australia Post in line with changing habits and circumstances.
“The imperative for change is clear. We are governed by the 1989 Australian Postal Corporation Act,” he said.
“An instrument legislated before the internet boom and the creation of smartphones, when letters were the dominant form of communication, online shopping was yet to take hold and digital service provision largely did not exist.
“Performance standards issued under the Act are no longer fit for purpose to Australia Post as an enterprise or to the customers and communities we serve every day.
“Australia Post is owned by the Australian taxpayer, but we are not financed by taxpayers, we are entirely self-funded. We’re proud to be a self-funded public enterprise and we want to remain that way.
“We want to keep delivering essential public services to Australian communities and businesses without taking a penny from consolidated revenue. That is funding that should go to schools and hospitals, not Australia Post.”
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