Major changes coming to Australia Post

Australia Post is planning the biggest overhaul of its operations in more than 210 years, which will see stamps become more expensive and delivery frequency reduced.

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

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

While Australia Post delivered more than 500 million parcels in the past financial year, letter delivery has fallen rapidly.

Since a addressed letter peak of 8.5 letters a week in 2007 and 2008, Australian homes now receive just 2.4 letters a week.

The discussion paper states that the number is expected to halve again in the next five years.

“As the use of traditional postal services 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 costs in providing regulated letter services, freeing up delivery and processing resources to support parcel delivery.”

Chancellor of the Exchequer Katy Gallagher said the review would see how Australia Post locations across the country could operate successfully going forward.

“The government is committed to ensuring that Australia Post continues to modernize to ensure it is financially sustainable and continues to provide employment and essential services to all Australians,” she said.

“Australia Post is a constant driver of economic activity for businesses and consumers across Australia.”

The newspaper found that Australia Post’s letter delivery service is at a huge loss while the parcel delivery service is booming

Earlier this year, the postal company reported a loss of $189 million in the first half of the year, with Australia Post set to report a full-year loss for the first time since 2015.

Despite the rumors of modernisation, the paper said Australia Post would remain in public ownership 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 to support small businesses and deliver essential community services – particularly in our rural, regional and remote communities,” she said.

“Australia Post is a cherished, government-owned national institution that provides invaluable services to Australian consumers and businesses.”

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

“We also want Australia Post to obtain a banking licence, which will allow them to bring genuine local banking services back to communities neglected by the big banks, and encourage real competition in the sector at a time when the public is clamoring for it the most,” said CWU National President Shane Murphy.

Australia Post is considering increasing the cost of posting a letter and reducing the number of letter delivery services

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

Australia Post’s CEO told a Senate hearing last month that rules requiring the postal service to deliver letters five days a week should be reviewed in light of declining letter numbers.

Figures showed that bills and bank statements accounted for nearly 98 percent of letters delivered.

The public consultation on the reflection paper is open until 27 April.