SIX DAY A WEEK MAIL DELIVERIES WILL STAY (NZ)
New Zealand Post today moved to allay fears
postal services could be cut from six days to five days a week. Reducing delivery days is a longer-term option outlined in a report
by government officials as a way NZ Post could cut costs. But NZ Post chief executive Elmar Toime told NZPA today
six-day-a-week mail delivery would continue. ACT finance spokesman Rodney Hide obtained a report by the Crown
Company Monitoring Advisory Unit (CCMAU), which monitors and advises
the Government on the performance of State-owned companies, that
analyses NZ Post’s business plan and draft statement of corporate
intent. Mr Hide told NZPA the report showed NZ Post was “in trouble”.
“Post is trading in a very difficult environment, it’s under
competition from email and the Internet, it’s also under pressure
from the likes of Pete’s Post and they’re having to cut costs to
maintain their profitability.” That potentially meant losses of
service and at the same time, NZ Post’s proposals for the so-called
people’s bank was having a big impact on its bottom line, he said. The report said NZ Post’s financial projections showed an adequate
rate of return from its current businesses largely because of
cost-cutting measures and “strong contributions” from its courier
arm Transend and Sydney courier operation Couriers Please Pty. “However, NZPL’s forecast profits and dividends are very low. This
is largely because of the losses that are expected to be incurred in
its banking operations for the establishement phase.” CCMAU
remained concerned about the “inherent risks” of the bank, the
report said. Mr Hide said the bank was expected to bring after-tax losses of
$23.6m a year through to 2003/04 and as NZ Post channelled money
into the bank, its postal service could become “second rate” if
cuts were made. The report raised concerns about the vulnerability of NZ Post’s
letters business, which contributes about 54 percent of the SOE’s
total revenue. It said while deterioration in the letters business had been
expected for some time, “it is occurring more rapidly than had
previously been expected”. Mr Toime said letters volumes were decreasing by 1.6 percent a year
and this level of decline was expected to continue for several
years. Mr Toime said while NZ Post was facing more competition, it was a
“worthy competitor” and the business remained in “good heart”. He had been talking about managing the risk of reducing mail volumes
for some years. “You diversify your business, you see how you can use the assets
that you’ve got in your business in a broader base — so banking is
clearly an example of business diversification…and you look to
your own core productivity.” The report, which he had not seen,
analysed risk management approaches but tended to focus on negative
than positive possibilities. Mail deliveries would continue to be made six days a week.
“There is no plan to reduce the services in New Zealand,” he said
Copyright 2001 New Zealand Press Association.
Source: World Reporter (Trade Mark).NEW ZEALAND PRESS ASSOCIATION, 29th July 2001
