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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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