Post offices put out SOS to governments

Post office operators are calling on all levels of government to come to the rescue of the network after Australia Post profits plunged 70 per cent, raising the prospect of closures.

Falling letter volumes and a lack of price increases in stamps led to a 9 per cent drop in letter revenues to $2.2 billion from $2.43 billion, Australia Post announced on Thursday.

Australia Post’s before tax profit for 2018-2019 was $41 million, down 67 per cent from $126 million. The results were “impacted by significant letter losses,” the government-owned company said.

In a statement POAAL, the national association for small business owners in the postal sector, said the continuing fall in letters presented an ongoing  challenge.

POAAL says post offices are the centres of the community and should be the local hub for government services around the country.

“Now is the time for all levels of government to offer more services via post offices,” POAAL director Bob Chizzoniti  said.

“The reach of the post office network is unmatched. Licensed Post Offices are at the centre of their communities, and have earned a high degree of trust.

“We call on federal, state and local governments to look at how they can offer their services through post offices.”

Mr Chizzoniti also called for better leverage of Australia Post’parcel delivery capabilities.

“Parcels are increasingly important to Australia Post and to our members. We have the biggest – and in my opinion best – delivery and retail network in Australia,” he said.

“It’s up to Australia Post to leverage that network and the Australia Post brand to continue to grow parcel volumes and profitability.”

The letters service had to be self-funding and not dependent on other parts of the service, he said.

Australia Post foreshadows closures

CEO and Managing director Christine Holgate warned the losses were likely to continue, resulting in the closure of post offices unless there was an increase in stamp prices.

Christine Holgate

She said if the postal service becomes  loss-making it will no longer meet its Postal Corporation Act obligations, and the government would have to act to ensure it returned to viability.

“Without an increase to the Basic Postage Rate, Australia Post will no longer be able to afford to fully subsidise the losses from the important post business, which would risk the closure of community post offices and a reduction in services,” she said.

“Australia Post is absolutely committed to honouring our community obligations and appreciates the essential role we play in communities, but urgent help is required.”

The company has lodged a notification with the ACCC seeking an increase in the basic postage rate which would increase the cost of a postage stamp from $1 to $1.10 next year.

Requiring posties to carry more parcels, automating work processes and implementing job cuts are other possible options on the table for Australia Post.

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