The federal government has announced a review into Australia Post to ensure the struggling government owned entity remains financially viable.

Possible changes could involve cutting down letter delivery days, increasing the cost of stamps, using technology to improve parcel delivery and finding internal efficiencies.

In February, Australia Post reported a significant deterioration in its financial position, including a record first-half letters loss before tax of $189.7 million. It will report a full financial year loss in 2022-23, the first annual loss since 2015.

Communications minister Michelle Rowland, who launched a discussion paper and consultation process on Thursday, said the average household now receives about one third the number of letters a week it did in 2007 – down from 8.5 letters to 2.4.

She admitted the days of the postal bike delivering letters are under threat.

“We have seen what happens around the world to state sponsored postal services when they fail … we will not let this happen to Australia Post,” Ms Rowland told a media conference.

In FY22, Australia Post delivered 3.1 billion fewer letters than in FY08 and it is forecast that Australian households will receive less than one letter per week by the end of the decade.

At the same time parcel delivery services are increasing with Australia Post delivering more than 500 million parcels nationwide in 2021-22.

Australia Post welcomes consultation

Australia Post says it welcomes the decision to undertake community consultation on modernising postal services.

“It is clear the status quo for Australia Post is no longer an option,” CEO Paul Graham said. “The business is on a path towards significant losses that, without change, will have to be covered by the Australian taxpayer.”

The reform agenda won’t include privatising Australia Post, Ms Rowland says.

 “We make this crystal clear up front in this paper there will be no priviatisation of Australia post or any part of it and servicing the needs of rural and regional Australia must be paramount in any modernisation,” she told reporters.

“We need the postie. We know that Australia Post will be there to deliver letters whenever they need to be delivered.

“Whenever the day comes, when the last letter is sent it will be delivered by Australia post.”

The review comes after it was revealed that in 2020 that four senior Australia Post management received $20,000 worth of Cartier watches as a bonus, resulting in an acrimonious parting of ways between the organisation and its former CEO Christine Holgate last year.

Asked by Government News whether the review would consider any executive level efficiencies or put a hold on bonuses to senior staff, Mr Graham said Australia post would continue to drive efficiencies within the business.

“The matter of bonuses is one for the board,” Mr Graham said. “We continue to review our structures and efficiencies .. and take costs out where it makes sense.”

Australia Post currently has a 60,000-strong workforce and  4,300 Post Offices, with more than 3,500 Post Offices operated by individuals and small businesses acting as licensees and agents.

It does not receive financial support from the government and Ms Rowland indicated the government isn’t up for a bail-out, saying “we want Australia Post to be financially sustainable. We want Australia Post to be able to stand on its own two feet”.

The consultation process is open until April 27.

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