Press conference on the Modernisation of Australia Post

MICHELLE ROWLAND, MINISTER FOR COMMUNICATIONS: Good morning, everyone. Australia Post is a cherished national institution that is over 200 years old. It delivers to over 12 million delivery points right around Australia. It performs a range of vital community service obligations and especially in rural and regional Australia, Australia Post not only serves as the post office; often, it is the only banking service in town, the newsagent or the retailer. So it is important.

 

But we know that Australia Post has been facing many challenges over a long period of time. These include the decline in letters being sent and received and also the rise of parcels. And we know that Australia Post faces particular competition from international competitors who are coming in, building their own networks, and Australia Post needs to ensure that it remains viable.

 

So, what I’m doing today is releasing a consultation paper on the future of Australia Post. What do consumers expect? What do small businesses need? How can rural and regional Australia be best served by this iconic institution? It’s important for Australia Post to be seen as a key driver of productivity in our economy. It needs to be adaptive. It cannot stand still. We have seen what happens around the world to state‑sponsored postal services when they fail. They fail their consumers and they fail their economies. We will not let this happen to Australia Post. That is the reason why we are kickstarting this process to modernise Australia Post who are currently subject to essentially the same regulatory burdens they had 25 years ago. We need to understand the challenges that Australia Post faces but equally, we need to be transparent and listen to Australians about what they need and how Australia Post can best service them. That is the purpose of this consultation.

 

Lastly, I want to acknowledge the most important asset of Australia Post is its people, its some 60,000 workforce. I especially acknowledge the work that is already being undertaken by the Communication Workers’ Union in conjunction with Australia Post to jointly develop trials of different delivery models. Feedback on these delivery models will be undertaken throughout April and June, and it is vitally important that the workforce is brought along on this journey, that they are properly consulted and that we understand how important they are to ensuring Australia Post remains financially viable so that their jobs, - their good‑paying jobs - remain viable as well.

 

I’ll hand over to Paul Graham, the CEO of Australia Post.

 

PAUL GRAHAM, CEO OF AUSTRALIA POST: Thank you, Minister, and good morning, everybody. Australia Post warmly welcomes the Minister’s announcement today and we support both discussion paper and the consultation process. A discussion paper on modernising the services of Australia Post is a conversation that, frankly, the Australian community needs to have. Our letters business has been suffering a decline since 2018. We face a difficult future as fewer people send letters and consumers increasingly embrace digital services, a trend that is playing out globally. Australia Post plays a critical role in the lives of all Australians and particularly, as the Minister mentioned, in rural and regional Australia and remote areas, and that is never going to change. Over the past three years, we’ve invested more than a billion dollars in our network and our digital capability, in our people and in our services. And we will continue to do that to ensure that we are meeting both the future and today’s needs of our customers.

 

But despite these investments, we’re on a path towards significant losses as Australians and the national postal service continue to change. We are an entirely self-funded business and so we do not want to become a burden on the Australian taxpayer and using the funds that we would otherwise lose to ensure that the Government continue to invest in the right things for the community – hospitals schools roads et cetera. We have a distinct two-speed business with our letters business weighing heavily and our e-commerce–driven parcel business where we compete with both multinationals and strong local players. We seek to gain a bigger market share, but if we don’t address our letter business, that will impact our ability to service the community not just in our mail business and our parcel business, our Bank@Post and the other broad services that we provide.

 

We have started making changes to meet the challenges that we face, but we want to hear from the community about what they want and how we engage and chart our way forward as an essential service to that community. The good news is that a financially sustainable and modernised Australia Post will be able to continue to invest to meet the challenging and changing needs of these communities both in metropolitan Australia as well as regional and rural Australia. We are looking to continue to increase more delivery points, create more efficiency and also make it easier for people to do business with Australia Post.

 

We are very aware of our significant service obligations and we want to ensure that we maintain those, but the way we are doing that is to ensure we have a financially viable Australia Post. We look forward to working with the Government and all stakeholders on this process and taking the feedback to help shape the future of Australia Post for the next 214 years.

 

JOURNALIST: Minister, we have seen a whole lot of regional banks close in the last number of years. Given there is going to be some kind of restructure in terms of how Australia Post functions and how it is financially viable, can you guarantee for regional Australians they are not going to see a reduction in the service?

 

ROWLAND: Well, I can assure regional and rural Australia that one of the primary principles we have in this discussion paper is to ensure that they are well-serviced and recognising the vital role that they play.

 

You mentioned banking services. We know that over the years, some 600 branches have closed in rural and regional Australia. In many, cases, Australia Post has been the entity that has come in and picked up that slack and fulfilled those obligations to the community. Australia Post is continually working to improve its Bank@Post system, which is in over 1,000 branches. I think it’s important to note that as these bank branches move out, they save money. But for Australia Post, the amount that is returned to those licensees as opposed to itself is actually not commensurate with the savings that those banks have made.

 

I assure rural and regional Australians that our primary focus is to ensure that they continue to be well served, that they have what they need and that we recognise them as being important - not only in terms of postal services and banking services, but also to the entire community. We have not made any decisions in this regard and I stress that this is a consultation paper. I’m very heartened by the response I’ve received so far from key stakeholders in this area representing the regions. They understand the need to modernise. It’s only by having a financially sustainable Australia Post that we can do more in those regions, including innovative attempts to improve things such as small and microbusiness needs.

 

JOURNALIST: Do you think that there are going to be any kind of Australia Post closures in regional Australia as the consultation process begins?

 

ROWLAND: To be clear, openings and closings of retail outlets occur as a matter of course, including, for example, as new suburbs are built and new postal services are put in. But also a lot of postal services are small businesses and they may choose to retire, move on, leases expire and so forth. That is part of the business-as-usual of Australia Post. Some coming and going. But it is our absolute intention that, and we make this crystal-clear upfront in this paper: there will be no privatisation of Australia Post or any part of it, and servicing the needs of rural and regional Australia must be paramount in any modernisation process.

 

JOURNALIST: Desperate times, desperate measures. What are you going to do? You are saying you are not doing anything regionally and locally. What are you doing mainstream? The price of stamps is going up? I mean, give us something you think will happen?

 

ROWLAND: There is a range of regulatory levers that the Government has, but also the day-to-day operations undertaken by Australia Post itself. The price of the stamp actually was submitted by Australia Post to the regulator earlier this year and it increased by 10 cents. So, we set out in this consultation paper a range of possible measures for which no decisions have been made one of them.

 

JOURNALIST: What are you going to do? Give us a few ideas so that people can understand.

 

ROWLAND: One of them that we’ve got in here, for example, is around stamp pricing. Another one is in terms of delivery options. I mentioned that delivery trials, new methods of delivery trials, are being undertaken at the moment because, as the CEO said, we have a situation where the letters business is actually losing money. It’s some $200 million that’s gone just this time alone. We need to ensure that the delivery model remains sustainable, that Australia Post continues to be able to service the needs through the parcel division, but, most importantly, that it is able to be financially sustainable to support everything that we need to do, not only in the regions but also to have a viable workforce.

 

JOURNALIST: So, daily deliveries would – so are daily deliveries in jeopardy?

 

ROWLAND: We point out in this discussion paper that there are a range of existing regulatory obligations. One of those is essentially a five-day delivery service. We currently have a situation where there’s only about two letters per household that are being received each week. I hazard a guess that many people don’t know that there is a five-day delivery service. So I’ll hand over to the CEO because we are trialling some different forms of deliveries to be able to make those savings, but also ensure that we meet those existing community service obligations.

 

GRAHAM: Yes, thank you, Minister. As the Minister says, you know, in a network of our size, we’re constantly looking at ways to drive efficiency and meet the changing needs as volumes are dropping down, as new suburbs come on. We deliver to 200,000 more delivery points each calendar year. So we’re delivering more points, but obviously less volume. I use the analogy; it’s like building petrol stations when everybody’s going electric. So, it is a key area of focus. And as the Minister acknowledged, we have a trial going on at the moment to look at how different models would work, but this is part of our normal course of business. We’re always looking at different models so we can do that – 

 

JOURNALIST: Can they change the rules, change the regulations we’re talking about?

 

GRAHAM: That’s a matter for Government. One thing that we can be – 

 

JOURNALIST: That’s what I’m asking you. I mean, you’re saying five days is not serviceable. Are you going to change that?

 

ROWLAND: Well, let’s be clear: that’s the reason why we’re having this consultation process. We want to understand – 

 

JOURNALIST: You want to save money. I mean, it’s obvious you need to save money and how are you going to do it?

 

ROWLAND: This is the start of a process. We are being upfront and transparent with the Australian people about what the existing obligations are, what the pressures are on Australia Post and what some possible outcomes are. We have made no decisions in relation to any of that. But what we do want to ensure is that we have a financially sustainable Australia Post. That lets us do other things, including being more innovative in servicing the needs of smaller microbusinesses, but also making sure that we can continue to invest in rural and regional Australia. The whole purpose of this consultation process – 

 

JOURNALIST: I get that, but people want to know what you’re going to do. What are the options you’re considering, particularly with delivery? We’re talking about people having to come to post offices to pick up their mail rather than having home delivered? What sort of options have you got in front of you that you’re going to be talking about with this consultation paper?

 

ROWLAND: This paper sets out a number of regulatory levers. They include the frequency of delivery, the time frames for items to be delivered, innovation in terms of people choosing different ways to receive their mail and parcels, and opens it up to anyone to have a view about what they want to see in their postal service. This actually hasn’t been done before. This type of open consultation with the Australian people about an important GBE has not been done before. And I would even go so far as to say this is more than 10 years overdue.

 

We have had 10 years of stagnation which has resulted in Australia Post being in a position where it is now about to sustain a loss - the first loss since 2015.  It’s important to note that Australia Post is expected, and should be expected, to continue to perform these vital roles in our community, to service the needs of small businesses. And I think it’s an important point that we are transparent with the Australian people about these challenges, that we ask them what they want to see in a modern postal service. Because we’ve seen around the world, state-sponsored postal services close and arein diabolical financial situations,requiring bailouts by their Governments. We are not going to let Australia Post fail.

 

JOURNALIST: If you’re changing delivery times or you’re looking to for the future, what does that mean for jobs?

 

ROWLAND:As the CEO alluded, we’re looking at different models of delivery. They are being trialled now. They necessarily involve the workforce to ensure that these are feasible and to ensure that people’s occupational health and safety is maintained as well. I don’t know if you want to speak more to the trial, CEO?

 

JOURNALIST: If you’re looking at changing the times, say, from a five‑day‑a‑week model so two‑or‑three‑day‑a‑week model, are you saying there won’t be any job losses because of that?

 

GRAHAM: Well, we’re focusing on making sure, as the Minister says, that Australia Post remains viable economically. We’ve got a growing business in our parcel business and other services that we’re providing. We will continue to be present in Australian streets, five, six and potentially even seven days a week because our parcel business continues to grow. And we will combine that with mail as well. But as the Minister says, we are looking at a number of models. We’ve got pockets of our business today where we don’t have enough people. So we continue to focus on making sure that Australia Post is financially viable. That’s good for jobs and good for the community.

 

JOURNALIST: Can you guarantee there won’t be job losses, though?

 

GRAHAM: We continue to look at growing our business in the position that we’re in today and, as the Minister said, the clock is ticking on our mail business. So the timing of this consultation process is ideal in terms of looking at our future needs and making sure that we can continue to provide good well‑paid jobs both in metropolitan and regional areas, but focusing on what the community needs. And what this consultation process is all about is hearing their voice as to the future of the services that they require from us, and that will then shape, as we get that feedback and work with the Government, the various models that we would look to potentially implement. But no decisions have been made at this time.

 

JOURNALIST: Will you be looking at executive-level efficiencies and will there be a hold on bonuses for senior staff?

 

GRAHAM: Well, the matter of bonuses is one for the board. We continue to drive efficiencies within our business. We’ve taken over $200 million of cost efficiencies in our business last financial year. We’re on track to do that again. We know we’re in a race with a lot of other global and domestic competitors and probably what is one of the most competitive industries in the world, the e-commerce parcel business. So it’s really critical for us to stay efficient. It’s critical for us to continue investing. It’s critical for us to continue to meet the needs, as the Minister mentioned, particularly of small and medium businesses who rely essentially on Australia Post to help grow their business. And that’s why we need to be financially sustainable, because without that sustainability our ability to invest and be innovative in those services becomes very, very challenging and therefore we open that market up to others.

 

JOURNALIST: How soon will there be changes on the table?

 

GRAHAM: We continue to review our structures and our efficiencies. We continue to take cost out where it makes sense, but also making sure we’re making the necessary investments in the areas of our business that grow and the areas of our business that need investment.

 

JOURNALIST: How soon can we see changes being made? Is it going to be this year?

 

GRAHAM: Well, the consultation process runs until the end of April. We will then – the Government will obviously take that consultation and the feedback into account. We will work proactively with the Government and all our stakeholders – the unions, licensed post offices, small business – to ensure that what is then looked at fulfils the needs of the community both today and into the future. But as a Minister emphasised, no decisions have been made as yet, which is why the consultation process is so critical and why we encourage anybody who has a view, be it a key stakeholder a small business or someone at home, around the future of Australia Post, we want that voice to be heard correct.

 

JOURNALIST: The price of stamps went up recently.

 

GRAHAM: January 1. Correct.

 

JOURNALIST: Okay. So that’s January 1. Are we looking at putting the price of stamps up further is what you’re trying to do here?

 

ROWLAND: That’s one of the regulatory levers in the consultation paper. But, again, no decisions have been made. It’s up to Australia Post to put in that application to the regulator if it chooses to do that.

 

JOURNALIST: You would hardly think the general members of the public are going to go, “Great, put the price of a stamp up.”

 

ROWLAND: The average Australian consumer sends about 15 letters a year. We emphasise the need to maintain those concession stamps as well. But I think another element that may be of surprise to many people is that some 97 per cent of letters that are sent today are from business and government. It’s actually three per cent that are sent by consumers. Increasingly, business and government is becoming more and more digitised, be it for cost savings or environmental measures. So we need to put that into context.

 

JOURNALIST: So in putting it in context, do we need the postie to deliver every day?

 

ROWLAND: Absolutely we need the postie.

 

JOURNALIST: In the cities.

 

ROWLAND: We need the postie. We know that Australia Post will be there to deliver letters whenever they need to be delivered. The last letter, whenever that day comes, when the last letter is sent, it will be delivered by Australia Post. But we need to understand the challenges that are being faced right now. We have a five‑day delivery service where the average person receives some two letters a week. In the next 10 years, that will be one. Meanwhile, the parcels business is booming. It’s facing intense competition and small businesses and rural and regional Australia need to ensure they are supported by this great institution.

 

JOURNALIST: So you’re conceding the postie on a motorbike delivering letters to peoples’ homes are under threat?

 

ROWLAND: It’s is a fact that we have much less letters that are being delivered now. But we need to ensure that we have in place the workforce that we need to fulfil all the functions that Australia Post has. We need to ensure we have a workforce that is adaptable. We need to ensure that they have good-paying jobs, be they in the letter section as it exists now or other sections of the business. We know that Australia Post is being adaptive now. It understands the challenges, and we want to ensure that it remains financially sustainable so that it can sustain these good well‑paying jobs, including for our fantastic posties.

 

JOURNALIST: Minister, do you expect at any stage that there might be federal funding required for Australia Post if it can’t work out how to make this financially sustainable?

 

ROWLAND: Well, let’s be clear. We want Australia Post to be financially sustainable. We know that the situation we inherited with a trillion dollars of debt and the situation we’ve inherited with this GBE is one that requires close examination, but I want to be very clear with the Australian people we want Australia Post to be able to stand on its own two feet. We want it to succeed. We want its workforce to meet the needs of Australians. We want to have good well‑paying jobs in this organisation that serve a productivity benefit right around this country.

 

GRAHAM: I think as the Minister also – you know, this is not something that has happened overnight. We’ve been seeing this trend for 10 years. I think the fortunate position we are in is that it’s not too late. And the discussion paper comes at a time when we can make the right decisions for the future of Australia Post and therefore continue to deliver for Australia. We have seen overseas where those decisions were not made and therefore the postal services went into significant decline and significant losses. We’re not there yet. I certainly as a CEO don’t want to go there and we don’t have to go there provided we work closely with our communities, with our customers and our stakeholders to shape the future of what Australia Post needs to be today and hopefully for the next 200 years.

 

JOURNALIST: And just very quickly on another issue, Minister, what’s your response to today’s AIC report that outlines low sexual violence reporting rates stemming from dating apps? How does the outcome from the roundtable progressed as we’re seeing that the problem is potentially getting worse?

 

ROWLAND: We are progressing those outcomes from the Roundtable, including engaging with the Federal and State Attorneys General, and also seeking advice from our various agencies into what further can be done. I’m very pleased that some of those dating apps whom I have engaged with since the Roundtable have, in fact, introduced extra safety features. It is a concern that some of those safety features are behind a pay wall, but we still know this to be a fact: there’s some three million Australians who are now using these dating app services but, unfortunately, we see that some three-quarters of people who are using them, predominantly women, are victims of some form of online abuse. It remains a very high priority of the Albanese Government to keep all Australians safe. We continue to pursue those outcomes and discuss the regulatory options, and I expect to have more to say on that very shortly.