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Crikey Says

Sep 5, 2014

Crikey says: privatise Australia Post

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For years, Australia Post has fought the threat of the internet to its core business creatively, making sure it was competitive in the burgeoning parcel business to take advantage of the growth in online shopping, expanding into other service delivery areas to take advantage of its large footprint across the country, and encouraging the junk mail industry, one of the few remaining growth areas in its letter delivery business.

Now, its CEO Ahmed Fahour has revealed, the tipping point has been reached and the company is unlikely to continue to pay a dividend to its owners — taxpayers — given the extent of its losses on its highly regulated letters business.

To survive as a business, Australia Post needs to be deregulated — allowed to charge more for letter delivery, allowed to scale back its delivery services. If there are valid concerns about the need for the maintenance of delivery services, especially in regional areas, let those be the subject of an explicit service obligation and appropriate government funding.

Consideration should also be given to privatising Australia Post. Indeed, Labor should have done that while in government, and then it would have been able to sell a viable business that was still generating a substantial profit. Now the government is left with having to either support an unviable regulated business, or free it up to address the dramatic change in the way Australians communicate. The time for avoiding this decision is over.

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21 thoughts on “Crikey says: privatise Australia Post

  1. Kevin_T


    Communications have changed meaning less letters are sent, and parcel volumes have increased, both because of the internet. Sorry, but I don’t read that as most Australians not wanting a postal service, moreso that many have changed how they use the postal service. If the percentage of items shipped through the Post Office now has swung from low charge items to higher charge items, then problems with letter rate should not be the core problem of the Post Office.

    I personally think there is a leadership and management problem, and that CEO Ahmed Fahour has done more to exacerbate problems than to remedy them, and has done much to alienate customers and staff. That is not to say that I think that privatising it will do better, as a full postal system will by the necessity of the vast area of Australia always have unviable areas of operation – and that is why it should be treated as an important infrastructure for the country as a whole, and indeed as a service, rather than being sold off as a public company whose responsibilities are required to be to the shareholders and not the community.

    As for the “fantasy” of the postal system as a service, if the Post Office is not returning a dividend to the Government, is it then dragging down the Australian economy or still substantially supporting it? Are roads really the only infrastructure a modern government should be supporting that does not return a dividend to the Government, (and in relation to your comment above it should also be remembered that not having to pay for the road infrastructure is a reason that TNT can in turn compete with the Post Office).

    Does a postal service that is viable for the communities, whether in the capital city CBD’s, outer suburbs, or rural and outback regions that supply us much of our food and clothing fibre, really drag down the economy if it does not return a dividend to the Government, or will removing the postal service make some communities (and many livelihoods within them) less viable and less productive?

    Regards, Kevin

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