Australia Post chief executive Paul Graham tackling a service in ‘unstoppable decline’

Australia Post boss, Paul Graham, says something has to give to save the organisation that is ‘no longer fit for purpose’.

CEof Australia Post, Paul Graham. Picture: John Feder/The Australian.

The way he sees it, Australia Post chief executive Paul Graham is the person called in to fix things: “All my career seems to have been about fixing things. I have never planned my career, but I worked hard and got thrown in to fix things.”

In an interview, Graham, under intense pressure this week as he explains how he will fix a mail service “no longer fit for purpose” recalled a CV that has offered plenty of challenges.

At the age of 23, his employer, a Sydney based customers broker, sent him to Asia for three months to recruit agents for their business. He joined logistics giant, DHL in 2000, a career which saw him working in Europe and Asia. In Singapore he managed a major restructuring of DHL’s Asian business, and was awarded a public service medal for contributing to economic growth. He was in the DHL headquarters in Bonn in 2016, as global chief operating officer and chief executive of its European operations, when he got a call from Woolworths chairman Gordon Cairns asking him to come back to Australia to shake up the supermarket chain’s logistics operations, a job he did for more than five years.

Graham now faces the ultimate repair job, turning around an iconic, government owned organisation with a history of more than 200 years. Some have speculated it may record a loss as high as $100m for the financial year to the end of June.

His predecessor, Christine Holgate, an executive with a strong marketing background, had left a high profile job as chief executive of vitamin company Blackmores in 2017, to take over Australia Post.

Her sudden and painful departure in October 2020, after being quizzed in the Senate for gifting senior executives Cartier watches for pulling off a major deal, shook the organisation.

Almost a year later, in September 2021, the straight talking, low key logistics veteran, Graham, was tapped to take on the job. Just more than 18 months into the job, Graham has a plan to cauterise the red ink on the mail side of the business which he says is in an “unstoppable decline”.

“I think I’m the right person, at the right time, to come into this organisation and use the skills and experience I’ve built up over 40 years, to take it through this transformation journey,” he says.

His plan, still subject to approval by the Albanese government, could include closing more suburban post offices, laying off some 400 staff this financial year, and amending the government imposed service obligation that mail needs to be delivered every working day. Graham knows he has a political window this year to implement a strategy to stop losses at the organisation. He knows what he wants to do but how much is politically possible will depend on what the cash-strapped government approves following a community consultation process on the “modernisation of postal services”.

“I’ve made the clear call that something needs to change,” says Graham during an interview in Australia Post’s offices in Sydney, once a thriving hub of letter sorting in the days before email. “Unless the government wants us to become a burden on the taxpayer – which we don’t want to be, and we don’t have to be – then we’re going to need some reform.”

With the lessons of Holgate’s high profile departure still fresh, Graham is aware of the need to keep government onside with any major changes. The government is now digesting more than 1000 submissions to its consultation process.

Graham wants changes to make the organisation financially sustainable. He can set some processes in train, such as making the organisation as efficient as possible (including lay-offs), but others need political approval and legislative change.

“Our goal is if there are changes the government supports, they would be through parliament this calendar year,” he says. “Next year, we are in a pre-election year. We’ve got this window where we know we have a clear plan. Given the right flexibility, we can execute a plan which will make this a sustainable enterprise. But if we don’t get those changes, then that window of opportunity – and the political window of the appetite for change – will close quickly.”

The problem is simple. The letter business has been on a slide since email; the parcel business is the future, driven by the major shift to e-commerce. Covid temporarily masked the problem, with Australians confined to their homes for long periods, but the structural problem worsened last year as lockdowns ended. Australia Post’s pre-tax profit slumped from $199m in the last six months of 2021, to $23.6m in the last six months of 2022. Profits from the parcel business were almost overwhelmed by the $190m losses on the letters business.

By the end of June, losses from the mail business will significantly outweigh the profits from the parcel business, a process which will continue unless there is significant change. The future is in parcels but many Australians – particularly the elderly and those in rural areas – still see daily mail delivery and the local post office as part of their lives.

“There are pockets of society which still see mail as being important, particularly in rural areas or people who are elderly or not digitally enabled,” Graham says. “But the vast majority of Australians get less than two letters a week and don’t see it as an important factor.”

Behind Graham’s years of experience is a tough upbringing. He grew up in Belfast in the 1960s amid The Troubles. It was a childhood where people lay in bed listening to the sound of gunshots and helicopters overhead. It was a period depicted in the 2022 film, Belfast, directed by British actor Kenneth Branagh and Graham says: “That movie was my life story. Same street, same neighbourhood, same school. There were soldiers and barricades in the street and my father was a vigilante, walking up and down the street at night making sure people didn’t get their houses bombed. Our house backed onto the docks and the railway yards.”

It was a time of political tension. Graham recalls his fear when he visited a person in a top security jail where he was serving time for driving a getaway car in a bank robbery – done to raise funds for the cause.

“It was in a secret location,” he says. “I had a blindfold over my head and we were taken into the prison to see him. I had never felt so scared in my life.”

In the movie, Branagh’s father struggles to convince his mother to leave for a better life in England. Graham was 11 when his father took a similar view and decided to get his family out of the city. Graham senior had been in the Royal Navy and visited Australia during the 1956 Olympic Games in Melbourne and decided it was the place to go. Like Branagh’s mother, Graham’s mother took convincing but eventually they came here as “Ten Pound Poms”. In Sydney, they were assigned to the East Hills migrant hostel built from old army Nissen huts.

“It wasn’t too pleasant,” Graham recalls. “You had to line up with everyone else to get breakfast and would sleep with a curtain separating you and the family next to you.”

The family eventually moved to a migrant hostel in Coogee. Later Graham went to Matraville High School, playing rugby with boys who went on to become Wallabies. They included the Ella brothers, David Knox, Lloyd Walker, and Wallaby coach, Eddie Jones. He is one of several Irishmen leading major Australian organisations. They include Qantas chief executive, Alan Joyce; ANZ and Optus chair, Paul O’Sullivan; and NBN CEO Stephen Rue.

Graham credits his migrant experience for his work ethic: “When you come from a background where you don’t have a lot, but you have a lot of energy and a strong work ethic, you do believe anything is possible.

“My dad says we came here with a dollar in cash and a million dollars in hope. That has played out for us. We are one of many millions of migrants who have prospered from the gift Australia has given us.”