AusPost braces for ‘significant losses’ but welcomes major rethink into its future

Major changes could soon be coming to the nation’s postal service as it warns it will be facing “significant losses” if nothing is done.

Australia Post has warned the status quo is no longer an option ahead of a major rethink to curb the business’ “significant losses”.

A decline in letter deliveries and booming demand for parcel services has changed the way the government-owned corporation operates over recent decades.

The federal government on Thursday launched a discussion paper aimed at modernising the postal service in an effort to make it more financially sustainable.

Paul Graham, AusPost’s chief executive, called it a conversation the brand needed to have.

Australians are being asked to have their say on the future of Australia Post. Picture: NCA NewsWire / Naomi Jellicoe

“Australia Post’s Letters business has been in an unstoppable decline since 2008 and the 214-year-old postal service faces an uncertain future as fewer people send letters and consumers increasingly embrace digital services,” he said.

Losses in the letter’s business have undermined the organisation’s long term viability.

Households receive approximately 2.4 letters a week – a third of what they received in 2007-08 – with modelling predicting that will fall to just one by the end of the decade.

Less than three per cent are sent by consumers. The remainder are sent by businesses and governments. On average, a person sends just 15 personal letters a year.

“It is clear the status quo for Australia Post is no longer an option,” Mr Graham said.

“The business is on a path towards significant losses that, without change, will have to be covered by the Australian taxpayer and that is money that could be better spent on schools, hospitals and roads.”

Australians are on track to receive just one letter a week by 2032. Picture: NCA NewsWire / Naomi Jellicoe

Increases to the price of stamps or fewer deliveries could be considered as part of the revamp.

But Communications Minister Michelle Rowland stamped out suggestion the government could privatise the postal service.

“We are very clear ... in the principles of this consultation that Australia Post will not be privatised,” she told the ABC.

The discussion paper labels the current postal regulatory framework – which includes the performance standards to deliver stamped reserved letters in accordance with the regulator or priority timetable – “inflexible”.

The government is also seeking feedback on whether to relax letter delivery frequency requirements, which the discussion paper said is “particularly cost burdensome in the face of declining volumes”, while also seeking to maintain “appropriate” maximum letter delivery speed regulations.

Individuals, charities, communities, businesses, as well as Post Office licensees and agents, and the wider Australia Post workforce, are also being asked to have their say on the future of the corporation.

Australia Post will report a full year financial loss this financial year. Picture: NCA NewsWire / Naomi Jellicoe

Ways to modernise the service could be through increasing flexibility and delivery reliability for parcel delivery, making it more convenient and accessible for consumers and small businesses, and continued support for regional and remote communities.

Submissions will close on April 27.

Finance Minister Katy Gallagher said Australia Post was a constant in the Australian landscape.

“The government is committed to ensuring that Australia Post continues to modernise, to ensure that it is financially sustainable and continues to provide employment opportunities, and deliver essential services to all Australians – particularly in regional, rural and remote Australia,” she said.

The discussion paper asks for Australian individuals, charities, communities, businesses, as well as Post Office licensees and agents, and the wider Australia Post workforce, to have their say on the future of the corporation.

Ways to modernise the service could be through increasing flexibility and delivery reliability for parcel delivery, making it more convenient and accessible for consumers and small businesses, and continued support for regional and remote communities.

Submissions will close on April 27.