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The loss of the Department of Social Welfare’s business could cost An Post EUR50 million a year in revenue, damaging a fledgling recovery at the State company.
The proposal, part of a review of how welfare payments are paid, signalled last month, is to be discussed by the Minister for Social Welfare, Séamus Brennan, and the Minister for Communications, Noel Dempsey, early next week. Mr Dempsey is the Minister responsible for the company. At present, An Post provides access to welfare payments for the majority of the 1.5 million recipients, but Mr Brennan wants to review the “effectiveness of the existing systems”. In addition, the legality of the current arrangement, whereby An Post delivers social welfare payments is being challenged in the European courts by a competitor. This has caused concern among post office staff and unions, who worry that An Post could suffer a significant drop in revenue if the Government switches entirely to electronic funds transfer (EFT).

While An Post may post a surplus, fundamental problems remain. When the senior management of An Post gather in the GPO in about three weeks time they may have some positive news to announce for a change. While there may be some incredulous looks from media representatives, the company’s chief executive Donal Curtin is expected to disclose a small surplus for 2004. In a recovery plan announced back in September 2003 the company was budgeting for an operating loss in 2004 of about EUR24 million. But An Post’s subsequent decision not to pay its 10,498 staff increases under the terms of Sustaining Progress has given the company a commercial breathing space.