Slower delivery and dearer stamps under planned Australia Post reforms

February 23, 2015 – 9:00PM

Matthew Knott, Gareth Hutchens

Ahmed Fahour says Australia Post is at crisis point.

Ahmed Fahour says Australia Post is at crisis point. Photo: Luis Enrique Ascui

Regular mail will take an extra day to arrive and basic stamps will cost up to $1 under a two-tiered pricing system expected to be announced within weeks by the Abbott government.

The government’s reform package is designed to help arrest the falling financial performance of Australia Post, which on Monday announced a 56 per drop in half-yearly profit.

Australia Post recorded a first-half profit of just $98 million, with the dive driven by mounting losses of $151 million in its letters business.

The government is preparing to loosen the regulations governing Australia Post so that it can introduce a “priority” and “regular” letters service. An official announcement is said to be “imminent” with an announcement expected as early as next week.

Fairfax Media understands that, under the reforms, Australia Post will be able to charge what it likes for a priority stamp, which would guarantee next-day delivery for metropolitan areas.

The Australian Competition and Consumer Commission would retain oversight over stamp prices for regular mail, which would arrive a day later than the current timetable. The Communications Minister would be able to disallow any excessive price rises for regular stamps.

Australia Post CEO Ahmed Fahour has said that Australia Post should be able to fully recover the costs of delivering a letter – estimated to be $1.

“We’re at a crisis point,” Mr Fahour told Fairfax Radio on Monday.

“What we need to do is to fix the regulation on letters to stem the losses, and that [will allow] us then to take our resources from subsidising the losses [on letters] to continuing to invest in the parcels business.”

Communications Minister Malcolm Turnbull said the financial result for Australia Post’s letters business was “not a pretty one”.

“Without change the company is heading to an overall loss,” he said.

Fairfax Media revealed in December that, under a range of scenarios outlined in Australia Post’s latest Corporate Plan, a “priority” stamp would cost $1.25 to $2 while a “regular” stamp would cost 70 cents to $1. The plan has not been released publicly.

Under the government’s reform package, concession card holders – including pensioners – would continue to pay only 60 cents for a basic stamp and stamps would remain cheaper during the Christmas period.

The government will justify the reforms by pointing out that businesses and governments send 97 per cent of mail and that a two-tiered business service has already been introduced for letters. There have been concerns at high levels of the government of a backlash to increased stamp prices, including from small businesses.

A coalition of printers, mail houses, licensed post offices and unions – called the Coalition of Mail Service Stakeholders – accused Mr Fahour of making a “cynical attempt” to build support for major cuts by releasing the half-year financial results one day before a scheduled appearance at Senate estimates.

“Australia Post’s claim that the organisation is on track to record a loss is not supported by the organisation’s recent performance,” Bill Healy from the coalition said.

“The underlying profit reported by [the company], before one-off costs such as restructuring, was actually up by over 10 per cent to $518 million last year.”

The Post Office Agents Association Limited, representing licensed post offices, said it supports the concept of mail reform.

“It is obvious that without changes to the letters service Australia Post will incur greater and greater losses,” the group said.

 

Source : The Canberra Times

Australia Post to axe 900 jobs

June 8, 2014

Jonathan Swan

National political reporter

One of the country’s oldest companies, Australia Post is forecast to go heavily into the red if it continues to offer its failing letters business.

Its 32,000 staff are expected to be told of the job cuts on Tuesday, with most of the cuts to be in Melbourne and Sydney.

In jeopardy: the future of Australia Post

In jeopardy: the future of Australia Post Photo: Jessica Shapiro

The everyday home delivery of standard-priced mail is expected to be another casualty of the crisis.

If Australia Post wins sought-after approval to change government regulations, standard mail will be delivered only two or three days a week, instead of the present five days.

The Sun-Herald has been told that private modelling has estimated Australia Post will lose $7.1 billion through to 2022-23 if the business continues on its present path.

Losses in the letters delivery business are forecast to be $12 billion over the same period.

Such grim forecasts convinced Abbott government ministers that they should not sell Australia Post, which was founded in 1809.

Australia Post’s 900 job cuts are expected to save the company about $90 million a year in salaries. The redundancies are understood to be in “non-customer-facing” jobs, including management, supervisory, administrative roles and IT staff.

About 70 per cent of the job losses will come from Melbourne, where the head office is located. About 15 per cent of cuts will be in Sydney. A smaller number of jobs will disappear in Brisbane and elsewhere.

A spokesman for Australia Post said: ”Australia Post has made it very clear that it is confronting dramatic change due to the impact of declining revenues in our letters service. It is already responding to those changes and is a much leaner organisation than it was three years ago. The net impact of these and other changes we need to make is still being worked through but supporting our people through these changes remains our top priority.”

Australia Post executives have long lobbied the government to reduce its five-day mail service to three days as the company is required by regulation to deliver five days a week to 98 per cent of homes and businesses across the country.

The job cuts – which follow a freeze on external recruitment last year – will be sold to staff and the public as being necessary to pay for the many “innovations” announced by the company. These include introducing Saturday parcel deliveries, Saturday express post services and extended weekend trading.

Australia Post chief executive Ahmed Fahour had been warning colleagues and the government of the company’s impending financial crisis unless urgent reforms were taken.

Mr Fahour, who was paid $4.8 million last year, said in a speech last month: “The unfortunate reality is that our regulated letters business is now bleeding money – as the community shifts away from letters and towards digital forms of communication. If we wait another 12 months it might be too late as the large losses from the letters will overwhelm the organisation.”

Mr Fahour added: “Without change and reform, Australia Post will not be able to survive.”

Australia Post’s most urgent problem is that while the population is growing and people are building more homes and apartments – thereby increasing the spread and cost of deliveries – they are also sending far fewer letters.

About 1 billion fewer letters have been sent over the past five years, which has led to mounting losses in the company’s regulated letters business. The letters business lost $122 million in 2010-11, $187 million the following year and $218 million last financial year.

Australia Post has consistently returned dividends to government since corporatisation in 1989. Last financial year’s dividend was $142 million but the federal budget last month forecast dividends would shrink to zero within a few years.

Union calls for retraining

A spokesman for Communications Minister Malcolm Turnbull declined to comment.

The postal workers’ union has called on Australia Post to offer retraining to any of the 900 workers whose jobs are reportedly on the line due to heavy losses.

The Communications, Electrical and Plumbing Union (CEPU) says reforms are unavoidable but the company is still turning a profit.

”It’s a terrible blow to lose jobs on this scale, but Australia Post is a big and evolving organisation and we’ll be making the case that new roles should be found for people who want to continue their service,” CEPU postal and telecommunications secretary Jim Metcher said on Sunday.

”The decline in volume of small letter delivery, Australia Post’s traditional service, does need to be addressed.

”But there is significant growth in new and emerging parts of the business, like parcel delivery.”

Sale not on the cards

Finance Minister Mathias Cormann has ruled out selling off Australia Post for now.

”Australia Post is obviously facing some structural challenges, job losses are always disappointing but the truth is that Australians write fewer letters,” he told Sky News on Sunday.

While the government had considered the Commission of Audit recommendation to privatise Australia Post, it didn’t think the time was right.

”I’m not going to rule out what may or may not happen in the future, but right now we’ve made a decision that it’s not sensible to proceed with a possible sale of Australian Post,” Senator Cormann said.

Acting Prime Minister Warren Truss said Australia Post faced a crisis in relation to falling revenue from standard letter deliveries.

”They are doing well, obviously in parcel delivery … but that represents a substantial change in the nature of the business,” Mr Truss told ABC TV.

He said maintaining mail services in remote and regional communities should be a priority.

-with AAP

Source : The Sydney Morning Herald

Australia Post to deliver parcels on weekends

May 9, 2014 – 8:42PM

Julie Power

Reporter

Australia Post will soon be open for business on weekends, its chief executive officer has said.

Australia Post will soon be open for business on weekends, its chief executive officer has said. Photo: Getty

Australia Post’s 700 corporate offices will open for Saturday trading from next Christmas, allowing customers to send and receive parcels on the weekends, Australia Post’s managing  director and CEO Ahmed Fahour said on Friday.

Announcing the move Friday, Mr Fahour warned Australia Post would lose as much as $1 billion a year if it didn’t implement reforms and changes. He said the traditional letters component of the business “was bleeding money as the community shifts away from letters and towards digital forms of communication.”

” We lost $218 million in providing the letters service last financial year,” Mr Fahour said.

“This loss has been growing – every year – since our letter volumes started declining five years ago. In this current financial year we are now projecting a $350 million loss in providing the regulated letters business.

“Our projections show that with mail volume declines now accelerating to between eight and 11 per cent per annum over the coming years, our letters business, under current momentum, will lose over $1 billion annually in the coming years. We do not have the ability to absorb this.”

However, six day trading and delivery will soon be available from all corporate offices, Mr Fahour said, while many of the 2,895 licensed post offices may choose to expand their weekend hours, too.

The Express Post and Express Letter guaranteed delivery service will also be available six days a week by adding a Saturday delivery option.

In a speech to the American Chamber of Commerce in Sydney, Mr Fahour said these new services reflected a shift away from declining letters services to a growing market for parcels, express and retail services.

He told the lunchtime crowd that profits on parcels and express business had grown 20 per cent each year since 2010.

Mr Fahour said a quarter of the post office’s revenue was now generated from services that only been created in the past four years.

“For an organisation of our size, a quarter of revenue is a remarkable change. For a business that’s 205 years old I hope that indicates just how rapidly we are changing and handling the customer decline in the usage of letters,” he said.

The Saturday expansion coincides with continuing reports that the Federal Government may privatise the 205-year-old organisation to add more than $3 billion to its coffers.

The post office was established by Isaac Nichols, Australia’s first postmaster, in a “simple room” inside his own home on George Street.

“It was a trusted place where the 10,000 British soldiers and convicts who were living here in 1809 could connect with their loved ones on the other side of the world,” said Mr Fahour.

Source : The Sydney Morning Herald

Commission of Audit meets with SBS and Australia Post

January 16, 2014

Heath Aston

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The Commission of Audit, given the task by the Abbott government of identifying opportunities to sell public assets and slash government spending, has held meetings with SBS and Australia Post.

The head of the audit, Tony Shepherd, also told a Senate inquiry the commission ”probably may consider” recommending the GST be raised or its base broadened.

Questioned about potential privatisations, Mr Shepherd revealed that audit commissioners would meet representatives of the National Disability Insurance Scheme this week. Treasurer Joe Hockey last year raised the prospect of Medibank Private taking on the administration of the NDIS.

Tony Shepherd.Tony Shepherd. Photo: Nic Walker

Opposition Leader Bill Shorten said it was apparent the government was now considering selling off the NDIS.

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The government plans to sell Medibank Private but the commission ”may or may not” recommend asset sales, Mr Shepherd said. He would not comment on a suggestion by Labor senator Sam Dastyari that the only reasons to meet SBS representatives was because it was either ”on the block” for sale or that its part-private funding model could be replicated at the ABC.

Mr Shepherd said SBS, which receives two-thirds of its $270 million funding from the federal government, requested the meeting. An SBS spokeswoman would not comment on its detail.

The government has played down suggestions Australia Post could be sold but the commissioners also met Australia Post managers.

Prime Minister Tony Abbott has ruled out changes to the GST but Mr Shepherd said ”everything is on the table” as far as the audit was concerned. He told the inquiry cuts had to be found to counter an ageing population, poor productivity and a persistently high dollar. ”This situation is not going to fix itself. The magic pudding is a fable,” he said.

Labor and Greens members of the committee, who have been accused of trying to make political mileage out of the audit process, leapt on evidence government ministers had directed the Commission of Audit since drawing up terms of reference.

At the start of the inquiry hearing Mr Shepherd said there had been no interference from the government but he later apologised when a letter from Mr Hockey and Finance Minister Mathias Cormann was produced by audit secretary Peter Crone. The letter, which began ”Further to the terms of reference, I am writing to provide guidance …” alerted the commission to government plans to cut public service jobs by 12,000.

Mr Shepherd revealed the commission may seek an extension as it struggles to finalise an interim report by the end of January.

Mr Hockey will keep all recommendations secret until after he delivers his first Budget in May.

The ACTU called for the public release of all 300 submissions the commission has received.

”When big dollars, big powerful companies and big decisions affecting millions of people’s lives are at stake, transparency should be paramount,” ACTU president Ged Kearney said.

”The Abbott government is looking to make extreme cuts to jobs and services around our country and is hiding behind the Commission of Audit. We are concerned by the dangerous level of secrecy.”

The Sydney Morning Herald

ACCC urges government to sell off assets

January 6, 2014 – 9:08AM

Labor has dismissed a suggestion that Australia Post offices could take on some work done by Centrelink.

ACCC chairman Rod Sims says the government should relinquish long-held assets, such as Australia Post, to ensure productivity and the greatest benefit to the public. Photo: Dave Langley

National assets including Medibank Private and Australia Post should be sold, the Australian Competition and Consumer Commission has told the government.

The ACCC has also urged Prime Minister Tony Abbott to push for the privatisation of state-owned energy companies.

Chairman Rod Sims has told The Australian Financial Review a root-and-branch review of competition laws should recommend the government relinquish control of long-held assets to ensure productivity and the greatest benefit to the public.

ACCC chairman Rod Sims

ACCC chairman Rod Sims Photo: Nic Walker

”I think it would be the most important driver of how Australia improves its productivity,” Mr Sims told the Fairfax Media paper.

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”Of all the reviews going on, this will be the most important because it will be removing impediments to competition right across the country.”

Government ownership versus private ownership massively affects the incentives people have to drive productivity change.”On the matter of energy assets, Mr Sims said consumers would be paying less for electricity, particularly in Queensland and NSW, if the assets had been in private hands.

The ACCC boss said his priorities this year would include pursuing large penalties against major companies who breached consumer laws as well as closely monitoring petrol prices.

AAP

The Sydney Morning Herald

Porn not an automatic sacking offence: tribunal

September 4, 2013

Noel Towell

Sending porn through the work email system is not an automatic sacking offense.

Sending porn through the work email system is not an automatic sacking offense. Photo: Louie Douvis

Sending porn through the work email system is not an automatic sacking offence, Australia’s employers have been warned.

The nation’s industrial tribunal says ”special rules” do not apply to email porn peddlers in the workplace and the same unfair dismissal laws apply as with other forms of misbehaviour.

The full bench of Fair Work Australia has found that three Victorian postal workers were ”harshly” dismissed after being caught using the Australia Post email system to distribute sexually explicit material around their workplace. Fair Work will hold a hearing behind closed doors this month to decide if the three should get their jobs back.

One of the three commissioners hearing the case dissented from his colleagues and backed Australia Post’s actions in sacking the men.

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The men, who worked at Australia

Post’s Dandenong Letter Centre, were among 40 workers disciplined by the postal authorities over online activities in 2010.

The three workers, who have secured a non-publication order on their names, were sacked after an investigation found a large number of workers involved in accessing, storing and distributing pornographic material, some of it ”hardcore”, around the workplace.

The activity came to light after Australia Post installed new email software filter on its internal email system which led to the discovery of widespread distribution of ”inappropriate” material in some of its Melbourne workplaces.

”Most of the material was softcore pornography and no more salacious than material that might be viewed on free to air television almost any night of the week,” the tribunal found.

”A small amount of the material is properly classified as hardcore.”

After they lost their initial appeal last year against their dismissal, the three workers took their case to the Full Bench of Fair Work Australia.

Fair Work Deputy President Michael Lawler and Commissioner Anna Lee Cribb wrote that bosses could not automatically sack a worker for distributing porn to colleagues.

”There is an emerging trend in the decided cases towards regarding the accessing, sending or receiving and storing pornography by an employee as a form of serious misconduct that invariably merits termination of employment,” the commissioners wrote.

”Such a proposition is inconsistent with basic principle. Accessing, sending or receiving and storing pornography is not a separate species of misconduct to which special rules apply. It is a form of misconduct to which the same general principles apply, as apply in all unfair dismissal matters involving reliance on misconduct.”

The commissioners found that Australia Post should have considered the length of service – between 11 and 17 years – of the men it sacked before it made its decision.

Fair Work also found there was no evidence of harm caused by the three workers sending porn to their friends at work, that Australia Post had done nothing for several years to enforce its own standards on its workforce and that managers over the years had received the material and done nothing to warn employees that its distribution was against the rules.

The case will be heard again in Melbourne, on closed session, on September 19.

Canberra Times