Assessing cross-subsidy in Australia Post 2005-06: an ACCC report

The Australian Competition and Consumer Commission today issued its second report on whether Australia Post is subsidising its competitive activities with revenue from its monopoly activities. The report analyses the 2005-06 regulatory accounts of Australia Post. “The results of the analysis are similar to last year,” ACCC Chairman, Mr Graeme Samuel, said. “The regulatory accounts do not provide evidence that Australia Post is subsidising its non-reserved services from its reserved services.” Logistics, which is one of the non-reserved services, was again the recipient of a subsidy in 2005-06, but the source of the subsidy appears to be the other non-reserved services, not the reserved services. This was a result of logistics related infrastructure being under-utilised while Australia Post builds this part of its business. “In 2005-06, the shortfall in revenue earned compared to the direct cost of providing logistics is less than in 2004-05,” Mr Samuel said. The 2005–06 cross subsidy monitoring report will be available from the ACCC’s website.

This report presents the results of the ACCC’s analysis of Australia Post for the 2005–06 financial year to determine whether or not it is cross-subsidising from its reserved services to its non-reserved services.