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Australia Post deliveries could be reduced to three a week by end of year

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Is it time to end daily mail delivery?

The Opposition will work constructively with the Government on Australia Post says Labor MP Ed Husic. Also with Liberal senator Scott Ryan

PT0M0S 620 349

Australia Post could be given the OK to end the everyday delivery of standard mail and introduce a two-tiered pricing system as early as year's end, under reforms being considered by Communications Minister Malcolm Turnbull.

Mr Turnbull is expected to present a rescue package for Australia Post, including three-day-a-week delivery for standard mail, to federal cabinet within months.

Turnbull's fast-track reforms: The daily mail delivery could be reduced to three a week by the end of the year.

Turnbull's fast-track reforms: The daily mail delivery could be reduced to three a week by the end of the year. Photo: Anthony Johnson

Mr Turnbull is also actively considering allowing the company to introduce a two-tiered pricing system, similar to Britain's second-class mail service, for non-urgent letter deliveries. Customers wanting speedier letter delivery would pay more than the standard rate.

Safeguards for disadvantaged Australians, including pensioners, would be included in the reform package.

Representatives from Mr Turnbull's office have told stakeholders the Minister aims to take reforms to cabinet within two months and to change Australia Post's community service obligations within six months. The final shape of the package will be influenced by Australia Post's corporate plan, to be handed to government next month.

Australia Post, which last week announced 900 job losses, is lobbying the government to remove rules requiring the company to offer a uniform rate for standard letter deliveries and to deliver mail five days a week to 98 per cent of the population. It is pushing for regulatory change by the end of the year on the grounds that plummeting letter revenues make the situation an urgent one.

Australia Post believes the reforms will allow its regulated mail business, which lost $218 million last year, to approach a break-even point over the long term.

The push will gather pace next week when the government tables the executive summary of a Boston Consulting Group report into Australia Post's financial state. It is understood the review will validate Australia Post's projections of rapidly accelerating letter losses and will back the introduction of three-day-a-week letter deliveries and two-tiered pricing.

Australia Post managing director Ahmed Fahour briefed politicians from all sides on the need for reform during a visit to Parliament House on Tuesday. Mr Fahour announced a package to help struggling rural and regional licensed post offices by contributing an extra $40 million a year in annual payments and introducing credit card and eftpos services to 430 licensed post offices.

''While letter volumes decline, we are committed to not only keeping our post offices open and vital to the communities they serve but also growing their relevance by evolving them from a reliance on letters through increasing the trusted products and services they offer,'' Mr Fahour said.

Nationals Senator John Williams, chair of the Senate Communications committee, said he was a supporter of three-day-a-week postal delivery.

''If people aren't sending much mail, why do you need it every day?'' he said. ''If you lose your local post office you lose the heart of your community, so it's important to keep them viable.''

A spokesman for Mr Turnbull declined to comment.

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114 comments

  • But they will still lose the mail anyway lol. This will dig their own grave because everyone will just want their letters delivered electronically online instead for fast convenience. Who would pay extra for a letter? It's not the consumer its the society changing. We don't get letters hardly anymore. Everything is online. It's Australia Post that failed to move in with the 21st century.

    Commenter
    The Other Guy1
    Date and time
    June 18, 2014, 7:30AM
    • @The Other Guy1, yeah righto, tell that to the millions of people who cannot even use a VCR/DVD player or even a new TV, or a smart phone. Tell that to the millions who cannot afford online communication. No matter how much you can educate people, there still remain a large percentage who just CANNOT use, learn or afford the new technology. Removing the service would discriminated these people and further remove them from society!

      Commenter
      Are you Series
      Location
      The Grey Army
      Date and time
      June 18, 2014, 7:47AM
    • An interesting observation, except that you have the cause and effect reversed.

      Reduction in snail mail is the cause.

      The effect is that Aust Post must apply to the Government to have the law changed so that it is: Permitted to "...move in with the 21st Century"

      Commenter
      Toshack
      Location
      Latrobe Valley
      Date and time
      June 18, 2014, 8:06AM
    • The reason Australia Post is taking these measures is because mail is now sent electronically. How did Australia Post fail to move into the 21st century? It's not the fault of Australia Post that email was invented. How many people would get mail five days a week anyway? I feel sorry for the posties who will have their hours reduced but three days a week is plenty.

      Commenter
      Catherine
      Date and time
      June 18, 2014, 8:12AM
    • I would have thought most personal correspondance is already via online channels. However it will be hard to send items such as replacement credit cards and any online purchase such as clothes or what ever it is you like to buy.

      Commenter
      d d
      Date and time
      June 18, 2014, 8:48AM
    • Surely the decline in letter postage is a furphy. Yes, letters would have declined due to email but packages due to online shopping would have increased. I'm certain the volume of the latter would be greater than that of the former.

      Commenter
      Leigh
      Date and time
      June 18, 2014, 9:19AM
    • That's all well and good, but a lot of things like wedding invitations and postcards (a bit retro, but still sent) aren't as nice when they're delivered electronically. Also, let's not underestimate the volume of internet shopping that is delivered around the country every day - you can't receive that stuff in an email.

      Commenter
      Mads
      Date and time
      June 18, 2014, 9:49AM
    • @Leigh: These changes are talking about standard mail, with I believe doesn't cover parcels. Regardless, if speedy delivery is important, I'm sure australia post will offer an "express" service, and if they don't then competitors surely will.

      Parcels are increasingly profitable, though it can be hard to tell, as when a truck/plane has both letters and parcels I believe the costs are all apportioned to the "letters" division. Parcels could cross-subsidise letters, but Australia post doesn't have a parcel monopoly. So their competitors would probably undercut them on parcels if they tried to do that too much. This completely ignores questions about whether parcels should subsidise letters.

      @Mads: If wedding invitations arriving one day later would throw everything into disarray, then I would suggest sending them a day or two earlier, or paying for express delivery.

      Commenter
      Commenter2095
      Location
      Kingsford
      Date and time
      June 18, 2014, 10:13AM
    • @Leigh Unfortunately this is not true, the decline in standard mail volumes has been enormous over the past 10 years, and while the courier style mail has increased it has not come close to making up the difference. A quick search on SMH has the volumes.

      Commenter
      Adam
      Location
      Sydney
      Date and time
      June 18, 2014, 10:22AM
    • Australia Post made over $310 million in profits in 2013, up from around $280 million in 2012 or a ROE of over 18% for AP's sole shareholder, the Australian government.

      Why are we having this debate?

      Also, it would be good to remember what demographic will be most affected by the loss of the daily trip out to the mail box on the front fence, yep seniors who are already angry about changes to their pensions.

      Commenter
      Paul01
      Location
      Riverina
      Date and time
      June 18, 2014, 10:49AM

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