Overhaul Incoming for Australia Post
The continuing speculation that the Abbott government will announce the privatisation of Australia Post in the federal budget is probably premature, but on the right track.
The National Commission of Audit did list Australia Post as one of the government business enterprises that should be privatised, but put it within the group to be sold in the “medium term”.
That fuzzy timeline reflects the reality that Australia Post isn’t currently lobbied for privatisation and there would need to be a significant restructuring of the business and considerable thought put into its continuing community service obligations before a sale could sensibly be contemplated.
Australia Post’s chairman, former Telstra CFO John Stanhope made it clear that regardless of whether or not a sale is on government’s agenda, the group will be seeking structural change within its regulated services.
Having already increased the price of stamps by 10c to generate an extra $100m a year, Australia Post is contemplating tiering its letter services, reducing the frequency of standard mail deliveries and introducing a user-pays model under which those who want more frequent deliveries will pay premiums, possibly including an annual fee for more timely mail.
That’s similar to the two-tiered pricing structure adopted in Britain, where the bulk of the Royal Mail service was privatised last year.
Apart from its obligation to provide domestic and international letter services, Australia Post also has to maintain at least 10,000 street post boxes and 4000 retail outlets.
Ahead of any sale, and even if there were no privatisation, Australia Post would need to think through its optimum distribution footprint and how best to leverage its physical network.