Rod Sims

"The private sector will run commercial enterprises more efficiently than government": Rod Sims. Photo: Sean Davey

Labor has demanded that the federal government say whether it plans to sell Australia Post, as a former commissioner of the competition regulator says the postal service ought to be privatised.

Debate flared on Monday after Rod Sims, chairman of the Australian Competition and Consumer Commission, was reported to be urging the Abbott government to consider selling Commonwealth-owned assets such as Australia Post and Medibank Private.

In the ensuing debate, Mr Sims said he was only talking about the benefits of privatisation in general.

''There was no reference made to privatise any specific Commonwealth-owned entity,'' he said.

Mr Sims said privatisation would be key to improving Australia's productivity and that the government ought to consider all government-owned assets in its ''root and branch'' review of competition laws.

''Generally, the private sector will run commercial enterprises more efficiently than government,'' he said.

But a former ACCC commissioner, Stephen King, came out strongly in favour of a sale of Australia Post on Monday, saying the national broadband network would make letters redundant.

''It should certainly be looked at and my own view is it probably should be privatised,'' Professor King said.

''The government is building and will own a national broadband network that will link rural and regional Australia to urban Australia with universal service and a uniform price replicating exactly the old standard letter obligations of Australia Post.

''Once that's done, why on earth does Australia Post have to have universal service?''

Labor and the unions criticised the idea that the postal service should be privatised.

''Communities around Australia will be worse off if Australia Post is privatised, especially those in rural and regional Australia who depend on its services,'' acting opposition communications spokeswoman Michelle Rowland said.

''In many rural and regional areas, the Australia Post outlet is often the general store, the newsagent and provides banking and bill payment services [and] all these services are under threat if Australia Post is privatised.''

Joan Doyle, the Communications Workers Union's Victorian secretary, said the sale of Australia Post would be ''a disaster for the community and our members''.

''Australia is a really big continent and it's sparsely populated and the whole postal service works on a cross-subsidisations process,'' she said.

Communications Minister Malcolm Turnbull said the government had no plans to privatise Australia Post. He referred the media to a letter he had written to unions in May last year in which he said Australia Post had been meeting its performance standards.

''The Coalition has no plans to privatise Australia Post,'' it says.

A spokesman for Nationals leader Warren Truss said the government did not plan to sell the service.

''The government doesn't have any policy to sell Australia Post and we won't speculate on the possible recommendations of the Commission of Audit,'' he said.