Senate inquiry calls for Australia Post to rethink pay for licensed post offices

A Senate inquiry in Australia has called on Australia Post to renegotiate its contract with almost 3,000 licensed post offices and ensure margins for operators are in line with commercial practice. The inquiry has also demanded a full government review “as a matter of urgency” of payments made to licensed post office operators under the current deal, over claims they are “not fair or reasonable”. It was suggested that prices paid to operators have not kept up with inflation for years.

Australia Post should only be given more commercial freedoms if the move supports the universal service and a viable network of licensed post offices, it said.

The Senate report also called for Australia Post to urgently reassess post office box payments to licensees. And, it said additional payments should be made to licensed post offices facing additional storage requirements for the growth in parcel volumes.

Licensed post office operators should be able to return unsold and out-of-date stamps to Australia Post.

And, the Senate inquiry said that the “poaching” of business from licensed post offices by Australia Post-owned post offices was “unacceptable”.

Independent Senator for South Australia, Nick Xenophon, and Queensland LNP Senator Barry O’Sullivan called on Australia Post and the Government to respond as a matter of urgency to the “damning” findings of the long-running Senate inquiry.

Senator Xenophon said licensed post office operators had told him they were facing potential ruin with current “unsustainable” trading conditions and little or no recourse to renegotiate agreements.

“Many LPO operators are on subsistence levels of remuneration, or are eating into their existing assets to keep their businesses afloat,” he said.

“The trading conditions imposed by Australia Post on its own LPO network are unacceptable and unsustainable and ultimately self-defeating for an organisation serious about fulfilling its universal service obligations. There is no question that Australia Post is at the cross roads, and with it the future of almost 3000 licensed post offices across the country together with a number of franchisees.”

Australia Post

Australia Post said in response to the report that it was committed to maintaining its network of post offices.

“We recognise our licensees form an important part of our network and acknowledge that they face the same challenges of declining letter volumes and customer foot traffic as the rest of the Australia Post network. We have consistently stated our absolute commitment to maintaining our extensive post office network.”

The state-owned company pointed to evidence it submitted to the inquiry that claimed there were “no systemic issues with the financial viability of the LPO network”.

Australia Post also highlighted a $40m package of additional support for licensed post offices, on top of the annual budget of $339m, which will include an increase to minimum payments for rural post office operators, additional payments for scanning and delivering parcels, and increases to over-the-counter bill payment rates.

The Post Office Agents Association Ltd, which represents licensed post office operators, said it was reviewing the report and its recommendations.

It said the inquiry had made no recommendations concerning delivery contracts, including mail, parcel, RSD/rural and Star Track contractors.

“Contractors make up a significant part of Australia Post’s delivery network, especially in rural areas,” said POAAL Director Robert Chizzoniti.

POAAL also said that there was no recommendation that Australia Post remain in public ownership, which “leaves the door open for Australia Post to be sold off post-2016”.