Australia Post boss Paul Graham says regulations governing the mail carrier are ‘no longer fit for purpose’
Australia Post boss Paul Graham says regulations the mail service operates under are ‘no longer fit for purpose’ as they were created before the internet and smartphone revolution.
Australia Post chief executive Paul Graham has labelled regulations the mail service operates under as “no longer fit for purpose”, with it governed by a parliamentary act created before the internet and smartphone revolutions and whose staleness now threatens the financial viability of the 214-year-old institution.
And in the mail carrier chief’s sights could be the end of mandated daily mail deliveries through the week and the requirements for him to maintain an excessive number of physical post offices spread through metropolitan areas.
Australia Post could also seek to alter the way the prices of stamps are increased, which Mr Graham tagged as “draconian and old world”, and as well as other parts of its regulated obligations not fit for a modern 21st century communications company.
Mr Graham has also warned the postal service was at a crossroads, as the erosion of its traditional business model of delivering mail accelerated, placing Australia Post on track to post a steep financial loss this financial year on its letters business, after posting a $189m loss for the first half of 2023.
He warned it could face a similar fate as Canada Post, which due to inaction by politicians is now on track to a $1bn loss.
Addressing the American Chamber of Commerce in Melbourne on Thursday, Mr Graham urged Australian politicians to “get in front of change” and make the reforms necessary to ensure the future of the national mail service.
Mr Graham said this was crucial to save one of the last great institutions still held in public ownership.
“Qantas is no longer owned by Australian taxpayers. Neither is Telstra. Australia Post is,” he said.
The Australia Post boss’s speech and intervention on Thursday into the debate around the financial stability of Australia Post – and what needs to change to stem the flow of huge losses – comes at a critical time as public consultation on the federal government’s discussion paper, Postal Services Modernisation, closes at midnight on Thursday.
In March, the Albanese government launched a discussion paper and undertook community consultation on the modernisation of postal services. The consultation comes as more consumers embrace online rather than over-the-counter services and the use of letters continues to rapidly decline.
The Australian Postal Corporation Act was no longer fit for purpose, he warned.
“The imperative for change is clear. We are governed by the 1989 Australian Postal Corporation Act – an instrument legislated before the internet boom and the creation of smartphones, when letters were the dominant form of communication, online shopping was yet to take hold and digital service-provision largely did not exist.
“Performance standards issued under the Act are no longer fit for purpose to Australia Post as an enterprise or to the customers and communities we serve every day.”
Australia Post will soon lodge its own submission and Mr Graham said after delivering his address to the chamber that there were parts of the Act that needed to be removed, rethought or reformed.
“At the moment it (the Act) is quite restrictive in the language that it uses, it was written in 1989 before the advent of e-commerce, so we will work through with the government at what clauses or areas need to be changed.
“But the key thing is making sure if there are changes that they allow us to have the flexibility as an enterprise to make sure we can be commercially sustainable.
“Certainly where it (the Act) proscribes we must deliver the mail five days a week to every household in Australia, 98.5 per cent on time, again if you asked the average consumer out there is that important to them they would probably say not really and that parcels are important to me.
“The provision of the community service obligation that is wrapped up in that is also something obviously we are committed to and is part of the Act, and then the way the pricing is regulated around the price of a stamp is quite a draconian, old world process.”
Mr Graham said in his address there had been almost a dozen reviews of Australia Post in the last decade, and it was time for real change to occur.
“There have been more than 11 reviews of Australia Post over the past 10 years, and we do not need any more to repeat the same fundamental message: that the status quo is no longer an option for our business.
“The consultation process that closes tonight will help us develop the blueprint for change – but there is no question we must change. What we need is the commitment and goodwill from the parliament to make the changes necessary to deliver a sustainable future.”
Mr Graham said there might be a time later this year when parliamentarians are asked to consider changes to Australia Post to support the viability of the business.
“My simple request is to put the national interest first.”
Mr Graham said the slow decline of the mail service was accelerating, placing further financial burdens on Australia Post as it spends “more and more money to deliver fewer and fewer letters”.
“The average household today receives less than two letters per week and sends less than 3 per cent of all mail. We are also seeing declining foot traffic across our post office network as digital services replace over the counter transactions and more and more people choose to use flexible options such as our parcel lockers.”
Mr Graham said the mail carrier’s financial viability was important because Australia Post was owned by the Australian taxpayer but were not financed by taxpayers and were entirely self-funded.
“We’re proud to be a self-funded public enterprise – and we want to remain that way.
“We want to keep delivering essential public services to Australian communities and businesses – without taking a penny from consolidated revenue. That is funding that should go to schools and hospitals, not Australia Post.”
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