9.1
Over the recent past Australia Post has faced several periods of significant public scrutiny, such as the controversial resignation of the former Group Chief Executive Officer and Managing Director (CEO) that has been discussed in detail in Part 2 of this report.
9.2
Part 3 now looks forward, discussing issues relating to the future of Australia Post, in light of the evidence received by the committee in this inquiry. It discusses the following issues in turn:
the economic and community importance of Australia Post as a trusted and valued national institution, including the opportunities that the organisation has identified as strategic priorities for its future;
the nature and effect of the Australian Postal Corporation (Performance Standards) Amendment Regulations 2020 (temporary regulations), introduced on 16 May 2020, including the operations of the Alternative Delivery Model (ADM), a reported reduction in quality of Australia Post services, and greater pressure on the capacity of its delivery network and its employees;
potential extensions to the temporary regulations, and the lack of consultation on the future of the organisation; and
the review undertaken by the Boston Consulting Group (BCG) for the government, including work on scoping of the privatisation options for Australia Post, and links to the temporary regulations.
9.3
This chapter also includes the committee's view and recommendations on these matters, while noting that the following chapter considers Australia Post's provision of services to regional, rural and remote parts of Australia.
The economic and community value of Australia Post
9.4
Australia Post is one of the most valued, recognised and public institutions for Australians. It is central to our national identity and shared community. It is not only a valuable social and economic asset for the Commonwealth, but also a respected and trusted presence throughout the nation, from our city centres to our communities in rural, regional and remote areas.
9.5
Over its history, Australia Post has kept Australians connected with their friends, families and communities. It has also helped Commonwealth and state governments, businesses and many other organisations build and maintain networks across the country.
9.6
Australia Post has done this while meeting its legislated community standard obligations (CSO) and performance standards, which are founded on the principles of equity of access, affordability, and speedy communication reaching Australians five-days-a-week, wherever they live.
Economic benefits and opportunities
9.7
Australia Post is a significant asset for Australia's economy. It has delivered a profit for the Commonwealth every year since its incorporation as a government business enterprise (GBE) three decades ago, apart from in 2014‑15, when its volume of letters suffered a severe decline due to the rise of online communications.
9.8
As a profitable GBE, it reliably delivers a dividend for government, and gives a substantial return to Australian taxpayers. Although it certainly faces challenges from the rise of online communication and the subsequent decline of letter volumes, it has positioned itself over the last decade as a forward‑facing business and a modern fit-for-purpose national postal service.
9.9
In fact, Australia Post made record revenue and profit growth in 2020, when the organisation itself and many commentators had previously questioned whether it could remain viable against broad changing trends in the use of mail services, or the effects of the COVID-19 pandemic.
9.10
In its last annual report, Australia Post's business performance in 2019–20 was reported as 'record revenue' of $7.5 billion. This translated to a profit‑before‑tax of $53.6 million, up 30 per cent, while finding business efficiency savings of $281.1 million.
9.11
In 2020, Australia Post delivered an unprecedented level of mail traffic, helping Australians access the products they needed in the middle of the most severe pandemic for a century, while also helping Australian businesses reorient themselves to rapidly changing operating conditions. For example, in just one day in August 2020, 2.35 million parcels and letters were dropped off at post offices.
9.12
Australia Post's Annual Report 2020 noted that in the first eight weeks of the COVID-19 pandemic, the profits from eCommerce were up 80 per cent, with Australia Post delivering approximately 400 million parcels, including 118 million in the last quarter of 2019–20.
9.13
The growth of parcels had clear benefits to Australia Post's financial bottom line, with non-letter revenue up 15 per cent, to 73 per cent of total revenue. The Annual Report 2020 states that this represents a significant future opportunity:
We want our business to grow so that it delivers $10 billion in revenue and the ability to handle 700 million parcels annually by 2025. We want to be the partner of choice for our customers and suppliers and to be an employer of choice with world-class safety results.
9.14
However, there is currently a disjuncture between the most profitable part of Australia Post's core business—parcels—on one hand, and the regulatory obligations it has to provide a letter service on the other, where volume and profits are now in decline. This disjuncture was spelled out clearly by the Australia Post Chair, Mr Lucio Di Bartolomeo:
Parcels is our core business today. Certainly, our regulatory environment puts letters front and centre…
Growth is on the parcel side. And 80 per cent—mostly made up of parcels, let me say—of our revenue is revenue that we gain in a competitive marketplace. In other words, we don't have a monopoly. We are competing in the commercial space. So our focus has been for some time—and further reinforced, given the acceleration of these trends—on ensuring that we have a viable, profitable, successful parcel business.
Banking and financial services
9.15
Alongside this growing demand for parcels, Australia Post's handling of banking and financial transactions through Bank@Post services offers a significant opportunity for growth and service provision in the future. This is particularly the case for non-metropolitan locations, where traditional banking outlets have closed retail banks in many towns in regional and rural locations.
9.16
The committee received evidence that Bank@Post has lifted Australia Post revenues by around $216 million over four years since the deal with participating institutions was renegotiated in 2018. According to Australia Post, the benefits of this renegotiation were not only to its profits, but also that it 'enabled Australia Post to increase payments to Licensed Post Offices and further invest in [the] Post Office network'.
9.17
Ms Christine Holgate, the former CEO of Australia Post, noted in her submission that:
This [2018] agreement saved the Bank@Post service in around
3,000 Community Post Offices across Australia. The service was threatened with closure as it was heavily loss making. If the service had closed, the consequences would have been devastating for regional communities and many local Post Offices would have closed.
These landmark agreements were the largest ever investment into the Community Post Offices from a non-government agency and gave significant recognition and importance to the Community Post Offices and the vital role they play across Australia.
9.18
Australia Post sees Bank@Post as a vital part of its business going forward, not just financially, but also in building services for communities in areas where traditional banks have pulled out of regional and rural locations. For instance, a Non-Executive Director of the Australia Post Board, the Hon Michael Ronaldson, told the committee that the Board was very proud of and 'totally…behind the Bank@Post'. Regarding the current negotiations underway with banks to renew the service, he commented:
The only [institution] we couldn't get [in 2018 negotiations], which I think was a matter of great disappointment, was the ANZ. We are still working on that. Our executives are in discussions with the organisations. I gather it's going reasonably well, but it happens with the full imprimatur of the board. We want [Bank@Post] renewed and we want ANZ on board.
Social, community and national security benefits and opportunities
9.19
Alongside the clear economic benefits that Australia Post brings to Australians every day, it has a central role in our communities, including the role it plays in times of crisis. The Annual Report 2020 lays this out clearly:
We provide access to important services for the community such as applying for a passport, banking and financial services through a network of more than 4,000 Post Offices, including over 2,500 in rural and remote Australia. While many of the services offered in Post Offices are subject to digital substitution, in-person services remain highly valued by the Australian community. In addition, we offer a range of digital payment solutions for businesses and consumers.
9.20
There are clear benefits to not only local communities, but also to government in retaining this in-person approach. Over the last year, Australia Post has demonstrated its importance in providing the crucial infrastructure for governments to deliver essential supplies to impacted Australians through its established delivery networks and unparalleled reach. Indeed, as Australia Post has recognised, as 'the most present service provider in rural Australia', post offices and LPOs have pre-existing knowledge of local communities that is invaluable to government in times of need.
9.21
This presence all across Australia is not only in the retail outlets from our city centres to remote communities, but is also amplified by Australia Post's staff. Australia Post is a major employer, not only in metropolitan areas, but also across regional and rural areas. It employs more than 10 000 delivery workers—'posties'—delivering mail and parcels to addresses across Australia.
9.22
The value of Australia Post networks was shown last year, as Australia Post assisted Australians in times of emergency and crisis, including from bushfires and COVID-19. For communities facing bushfires, Australia Post offices and LPOs provided hubs for accurate and up-to-date information to be shared, a sense of community in times of need, and meeting many more practical needs, such as charging mobile phones, accessing the internet or getting cash out.
9.23
A recent Australia Post document sets out how Australia Post can play an essential role in the management of any future crises:
Australia Post's role in communities becomes heightened when disaster strikes. We've learnt a lot about how our network—from our Post Offices and vehicles to our thousands-strong workforce—can help those in need. In 2020, we were able to put our network into action to help the bushfire and pandemic responses; including providing access to cash and banking services in fire-impacted communities, and helping pharmacies to deliver medication to vulnerable Australians during the pandemic. We're ready to do more.
9.24
Australia Post also plays a role in ensuring our national security, and the security of businesses that rely on identification services. Australia Post provides a range of services relating to identity, including in-person identity checks, and services to protect identity through iDcare, a free Australia Post partner service which provides support for people who think their identity has been compromised or stolen.
9.25
Australians can apply for National Police Checks, and organisations can use Australia Post to conduct identity checks for employees, contractors and customers. It also provides facilities for people to lodge applications for or pick up passports at Post Offices, and in some jurisdictions drivers licenses can be renewed or applied for.
Recent regulatory, organisational and policy changes to Australia Post
9.26
This section discusses recent regulatory, organisational and policy changes to Australia Post in turn, noting the effects on services from these measures.
Temporary regulatory relief measures from 16 May 2020
9.27
On 31 March 2020 Australia Post wrote to the government seeking a temporary change to some of its community service obligations and performance standards. Although this letter has not been made public, the committee received evidence that the impetus for this was a Board meeting on 23 March 2020, which:
…considered Australia Post's response to, and preparedness for, the COVID-19 pandemic and its related impacts, and how Australia Post was preparing to manage through the COVID-19 pandemic and protect the business. The Board discussed, among other things, updates regarding our people, potential financial impacts on our business, operational impacts, government and stakeholder engagement, global considerations, and communications. The update on operational impacts outlined the preparation of a case to seek government support for temporary regulatory relief…
Australia Post wrote to its Shareholder Ministers on 31 March 2020. The letter was reviewed and approved by the Chair of Australia Post before it was sent to the Shareholder Ministers.
9.28
On 21 April 2020, the government announced the temporary regulations, commencing on 16 May 2020 and lasting to 30 June 2021. Australia Post suggested these temporary arrangements would assist to manage the pressures of a then-unprecedented volume of parcel traffic, and outlined the intention and effects of these amendments:
The temporary changes to delivery standards will help Australia Post to continue to service the broader needs of the community as quickly as possible.
It will enable us to retrain 2,000 motorcycle Posties as parcel drivers, to help process and deliver parcels in line with timeframes that our business and consumer customers expect.
The temporary regulatory relief includes suspending the priority mail letters service, extending the required delivery time for regular intrastate letters to five days after the day of posting, and allows us to deliver letters in metropolitan areas every second day, freeing up resources to help meet the massive demand for parcels. There have been no changes to letter delivery frequency in rural and remote locations, and also for collection from PO boxes and over the counter at Post Offices in all locations.
9.29
In practice, the regulatory relief allowed Australia Post to:
deliver letters every second day in metropolitan areas, rather than every day;
suspend the regulated priority mail letter service (although with the introduction of new non-regulated bulk mail arrangements);
extend the maximum delivery times for regular interstate letters;
manage its post offices, if necessary, including temporarily closing outlets to protect the health and safety of staff and customers due to the pandemic; and
move its workforce to the Alternative Delivery Model (ADM) system in metropolitan areas, in which maximum allowed delivery times were lengthened significantly, and a number of motorcycle posties were retrained to deliver parcels in vans.
9.30
In announcing these changes, Australia Post noted that 'there's no change to delivery frequencies in rural and remote areas', but that for metropolitan locations:
Same-state regular letters: Maximum required delivery time is now 5 business days.
Interstate-regular letters: Maximum required delivery time is now 5 business days between capital cities.
Maximum required interstate delivery time for other areas is now
6–7 days.
Priority Letter service: Our usual Priority service is suspended from
1 June 2020 up until 1 July 2021. A temporary alternative Priority service is available for [some] types of bulk business letters[.]
Delivery frequencies in metro areas: Letter deliveries are now required every 2 business days in metro areas instead of daily. For example, letters may be delivered to an address on Monday, Wednesday and Friday one week, with deliveries on Tuesday and Thursday the following week.
There are no changes to delivery frequencies in rural and remote areas.
Parcels, Express Post items and PO Box mail will still be delivered every business day.
Support for the regulations
9.31
The former CEO of Australia Post, Ms Holgate, outlined the benefits of the temporary regulations for Australia Post as:
…a suitable response to the business environment experienced since April 2020. Regulated letter volumes between April 2020 and February [2021] fell 17.4%, which is 314 million fewer letters than the same period the previous year. The service changes made during the period of the Temporary Regulatory Relief have been implemented with no forced redundancies and allowed Australia Post to apply its resources—both capital and people—where they have been most needed to meet the significant challenges and service demand changes. Moreover, during the period of the Temporary Regulatory Relief, Australia Post has introduced an alternate day delivery model in metro areas, which has enabled the transition of more than 2,000 posties to deliver parcels from vans at a time when there was an unprecedented increased demand for parcel services from customers and communities.
9.32
Some stakeholders supported the introduction of the temporary regulations, including Post Office licensees, representatives of the retail sector, and charities. Similarly, the measure was initially supported by some unions, including the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Community and Public Sector Union (CPSU), which both signed memorandums of understanding (MoUs) with Australia Post to protect the jobs and pay conditions of their members under the temporary regulations.
Concerns raised on the temporary regulations
9.33
A number of concerns were raised in evidence about the ADM introduced under the temporary regulations, including that it led to poorer outcomes for users of mail services, and degraded conditions for Australia Post staff.
Worse outcomes for consumers, businesses and mail users
9.34
Stakeholders argued that the ADM resulted in worse outcomes for users from less reliable delivery times for letters and parcels. For example,
Mr Shane Murphy, the National Divisional President for the CEPU, told the committee:
Under the alternate day delivery model—or the ADM, as it's known—introduced by regulations, Australia Post now only delivers letter based products to households every second business day rather than five days a week. Along with changes to workforce structure that have also led to significant delays to parcel delivery, these have been the most notable changes resulting from the regulations. In our submission to the Senate inquiry into these regulations last year, we warned the parliament that the temporary performance standards were likely to have a significant impact on services to the community, workforce safety and wellbeing. It is now around nine months since the full implementation of the ADM, and it is clear our concerns are well placed.
9.35
Mr Murphy contended that Australia Post is not actually meeting current delivery standards, despite their claims:
At the moment, Australia Post are failing the service delivery standards. They will say they are meeting their service delivery standards, under the regulation, at around 94 to 97 per cent. We know that the letters that are tested to meet this regulation are test letters, not the ordinary mail going to the Australian people. And they make sure these test letters are getting through the system, that they meet the regulations, so they can then show the Australian people it is all in order.
9.36
Evidence to the committee noted the dependence of many small businesses on the suspended priority mail services. The LPOGroup noted the increase in cost to the consumer as a result of the suspension of the priority mail service, which has been replaced with higher-cost, unregulated options:
While it appeared on the surface as just another evolution of the letter product, the change to the regulations to allow a two-speed letter service resulted in a more costly priority mail option to simply achieve the service standard that was previously available through standard mail at the basic postage rate.
9.37
Ms Brooke Muscat, Deputy National President of the CPSU, argued that the government should have provided Australia Post with financial assistance to meet the challenges of COVID-19, as 'an essential public service that local communities and businesses rely on'. Ms Muscat argued that:
Instead of seeking financial support for its supposed financial pressures, Australia Post and the federal government decided to reduce its service delivery and introduced every-second-day delivery at a time when the Australian public, the owners of Australia Post, needed this public service the most.
9.38
The temporary regulations were designed to have no impact on deliveries outside of metropolitan areas. However, the committee received evidence suggesting these changes have affected some regional, rural and remote delivery services, which is discussed in the following chapter.
Greater workload, pressure and job uncertainty for Australia Post staff
9.39
The committee received evidence that argued the ADM had increased workload, job pressures and employment uncertainty for Australia Post employees.
9.40
The submission made by CSPU noted that 'job security continues to be an issue for the Australia Post workforce'. It listed a number of significant concerns arising from Australia Post's management of the temporary regulations, including:
reports of employees being 'threatened with being stood down';
'extreme stress and anxiety' coming from concerns over job security;
pressure from management to exhaust annual leave and long service leave entitlements;
for employees with no leave balance, pressure from management to purchase additional leave, being forced onto Leave Without Pay, or to accept new contracts at lower pay grades;
refusal to redeploy staff members at current pay levels into operational roles, despite new casual staff being hired in those roles; and
announcements of restructures and redundancies in administrative and operations divisions.
9.41
Mr Murphy observed that the ADM affected not only the morale and capacity of employees, but also customer services:
It has never been worse for our community or our people delivering. Many have left the job, after years on the job, for mental health issues simply because it has affected them—not being able to deliver the products that their communities rely on under the ADM, as they'd done for many, many years.
9.42
This was reiterated by Mr Kerry Turner, a CEPU Workplace Delegate, who related his experience from his workplace:
…to give you a snapshot of the coal face, I did a survey and asked a simple question of 70 people at our facility: do you think ADM is working? The results were: 93 per cent no; and seven per cent yes, because they had motorcycles and smaller beats that they were happy with. And the majority of those said they don't believe that the customer is getting the best service at the end of the day, and it has definitely gone backwards.
9.43
Some organisations gave evidence that the temporary regulations arrangement should not be extended past their expiry of 30 June 2021. For example, Ms Angela Cramp of the LPOGroup explained that the organisation initially supported the introduction of the temporary regulations, as it gave LPOs some certainty in a time of great disruption from the pandemic. However, she suggested that it was now time to transition away from the ADM to five‑day‑a-week delivery, and lift back to the usual CSO standards:
If Australia Post is to have a future, it is imperative that the committee carefully review the regulatory relief requirements. Now that the impacts of COVID have diminished and the profits have grown substantially, we need Australia Post to get back to delivering on time and growing the opportunities to further service the nation.
9.44
Stakeholders from the union movement also saw it as critical that the government does not extend the temporary regulatory arrangements, due to the worse outcomes for staff and customers, as outlined above.
9.45
Ms Holgate's supplementary submission drew out the potential consequences of extending the temporary arrangements, including the effects on businesses, advising that the government should:
[Listen] to the voice of the customer and seek a thorough understanding of the impacts of stopping priority mail and longer delivery times. Priority Mail was a very important service for many small businesses and without the service many printing houses and magazine companies suffer. This could impact jobs further.
9.46
Moreover, Ms Holgate advised that when considering extending the temporary arrangements, the government and parliament should contemplate more than cutting costs, instead also taking into account:
The trade off from delivering significantly higher dividends compared to protecting services and jobs, whilst still remaining viable and delivering to the purpose of Australia Post for the benefit of all Australians.
Supply chain impacts
9.47
As evidence to the Senate Environment and Communication Legislation Committee's previous inquiry into Australia Post revealed, the ADM has had a serious impact on the printing and packing industry. The president of the Print and Visual Communication Association of Australia, Mr Walter Kuhn, and the Australian Manufacturing Workers Union Assistant Secretary for Printing and Packaging, Ms Lorraine Cassin, both told the present inquiry that they had not been consulted on the regulations.
9.48
Ms Cassin said that if Australia Post were to axe the Unaddressed Mail Service (UMS), as suggested in the BCG report discussed below, 'there would be job losses. We would see businesses having to lay people off'. Ms Cassin said that the introduction of the temporary regulations had been deceptive:
We've had no engagement from Australia Post … We can only go by what we're seeing in the public arena and what's come out through the Senate inquiry.
9.49
Ms Cassin noted that an ACIL Allen report had found that the mailing industry generated $14.3 billion for the economy in 2013–14, adding:
We would like to see more cooperation between Australia Post and industry stakeholders to promote the traditional mail service, such as the UK's Mail Matters More Than Ever.
9.50
Mr Kuhn said that the print and visual industry was Australia Post's biggest customer but Australia Post:
…[has] no engagement with the industry… They're not doing the right thing by the industry. The basic UMS, for argument's sake, is an area that could be grown within Australia Post, not reduced, and at no extra cost. Why would they want to shut that down?
Every time Australia Post sneezes, the industry catches a cold … The total volume of work that goes through Australia Post is indicative of what comes through the industry, and we're very concerned that Australia Post is trying to reduce the volume of mail going through the system, to the detriment of this industry.
9.52
Mr Kuhn said that whenever Australia Post had increased prices for the UMS:
…we saw a direct decline through the print houses. It would take some months for that to rebound slightly but it never went back to the previous amount. Since the pandemic started and everything was shut down, we have seen an increase come through. But, again, we feel that Australia Post are trying to create the decline of that area [UMS], hence the increased pricing and the reduction of services.
Review of the temporary arrangements
9.53
The government's response to the Senate Environment and Communications Legislation Committee's inquiry into Australia Post in 2020 made the following commitment regarding monitoring the temporary regulations and consulting appropriately on any further regulatory changes:
The Government will continue to monitor developments to make sure Australia Post is equipped to meet the needs of all Australians.
Should the Government propose future strategic changes, it would undertake a robust consultation process to ensure all relevant stakeholder views are considered, as it did prior to the 2016 reforms to Australia Post's letters delivery standards. This included Australia Post conducting community engagement events, discussions with key stakeholders (small business, licensees, Australia Post's workforce and unions), a National Conversations Portal and a Workforce Conversations Portal, customer surveys, consultation with key Commonwealth departments and discussions with its international counterparts.
9.54
The Department of Finance confirmed that the government was actively reviewing the temporary arrangements at that time:
When the temporary arrangements were put in place, ministers indicated that they'd review those arrangements after the first six months, and my recollection is that it was to assist with that initial review of the temporary arrangements.
9.55
In its submission to the current inquiry, the Department of Finance stated:
Future changes to Australia Post's service model are a matter for the Government. In its response to the Senate Inquiry into The Future of Australia Post's Service Delivery, the Government committed to undertake consultation, should future strategic changes be proposed that would result in regulatory and policy reforms.
9.56
However, on notice, the Department of Finance clarified that this review was being undertaken by BCG, with no details of the completion date or whether its report would be released publicly:
The variation to the BCG contract was executed on 31 July 2020 for the amount of $589,620.00 to consider the ongoing impact of COVID-19 on Australia Post's business and to evaluate the efficacy of the temporary regulatory relief.
9.57
Some evidence to the inquiry suggested that the government and Australia Post are actively looking for ways to extend the temporary regulations beyond their due expiry date of 30 June 2021. Some stakeholders saw this as a way of embedding performance standards that would reduce bottom line costs for Australia Post, while diminishing services and access for Australians. For instance, this was noted by Mr Murphy, who suggested that Australia Post's consultation about the future of Australia Post seemed only to extend to seeking the union's support for the extension of the temporary regulations.
9.58
Mr Rodney Boys, the current Acting CEO of Australia Post, told the committee that this consultation was on the broad future of the organisation, rather than simply the temporary measures:
We're consulting widely to work out the sustainability of Australia Post but also how we can service the customers. We've had 314 million fewer letters in the 11 months post COVID than we had in the 11 months
pre-COVID… To be able to service [growth in parcels], we need to redeploy some of our resources away from letters, which is loss-making. Those losses have been significant, and letters have been declining.
9.59
Mr Tony Nutt, a Non-Executive Director of Australia Post, also commented:
While the question of whether this relief should be further extended on a temporary basis remains a matter for government, it is now clear that we can't go back to where we were. Since the peak in volumes back in 2008, various independent reviews of Australia Post have determined that, in order to deliver on our dual purpose of meeting our community service obligations and not being a financial burden to the taxpayer, regulatory reform of some description is required… In determining ultimately what will be the framework for a sustainable Australia Post, we are committed to consulting with our people, union representatives, licensees, communities, customers and other valued stakeholders to develop a mutually beneficial outcome.
The Boston Consulting Group Review undertaken for the government
9.60
As outlined in previous chapters, the management consultancy firm BCG undertook a review for the government, ostensibly to inform the incoming Chair, Mr Di Bartolomeo. The Department of Finance set out its purpose as follows:
The Review of Australia Post by the Boston Consulting Group (BCG) was focussed on enabling Australia Post to operate as a sustainable and fit‑for‑purpose service provider, in anticipation of trends that were expected to continue over many years.
9.61
The Review cost $1.32 million, and its final report was handed to government on 21 February 2020. The Review was not released publicly, so the committee has had to rely on the following sources of information that were provided as part of this inquiry:
a Steering Committee paper from 11 December 2019;
a Steering Committee paper from 19 December 2019;
a presentation given by BCG to the Australia Post Board on
20 February 2020; and
an 'Executive Summary marked As at 21 February 2020'.
9.62
Consistent questions raised in this inquiry have been whether:
the BCG Review recommended privatisation of parts of Australia Post, particularly the lucrative parcels trade; and
the government had an agenda to privatise parts of Australia Post, which informed the terms of reference of the BCG Review.
9.63
On the first question, it is clear that the BCG Review closely considered 'divestiture'—or privatisation—throughout its process. For example, the Executive Summary from a BCG Steering Committee meeting on 11 December 2019 openly asked:
Should the divestiture of Parcels business be immediately explored…? [and]
…what AustPost be [sic] most effective effectively and efficiently operated in its current form or with a different corporate structure and/or owner? (e.g. corporatized, IPO'd)[i.e. listing the company on the stock exchange.]
9.64
The Executive Summary for this BCG Steering Committee meeting also noted the potential commercial benefits if Australia Post were 'directed to operate its Parcels business with a wholly commercial focus'. This outlined the potentially negative side effects to the net financial impact for Australia Post, including from 'up-pricing in non-metro, [and] ceasing any unviable coverage', as well as 'implications for senders and receivers (e.g. % priced out in non-metro)'.
9.65
Potential divestment and an increase to the commerciality of the non-metro Parcels business was still on the table in a following Steering Committee meeting on 19 December 2019, which lasted for around 2.5 hours. The paper for the meeting noted that there:
…appears to be merit in further exploring partial divestiture of this [parcels] business to release case and avoid significant investment over time.
9.66
It also noted that simply 'reducing affordability for as many as 2 million citizens in non-metro areas', that is by lifting prices for rural and regional Australians, 'may have problematic commercial flow-on effects', for instance making services unaffordable for everyday people and businesses.
9.67
This option was also evident in the BCG presentation to the Australia Post Board, given on the day before the final BCG Review was handed to government (20 February 2020). This presentation set out options to reduce the quality and accessibility of services with an eye to eventual privatisation:
BCG believes it is prudent for Government and AusPost to undertake more fundamental, sequenced reforms to AustPost's current regulatory and operations. These include:
Reducing letters service standards (frequency and speed)…
Streamlining the metro CPO network by closing at least 106 unprofitable outlets… [and]
Exploring the potential for a divestiture of Parcels, while noting that this would leave a loss-making core business without meaningful reforms to letters.
9.68
More specifically, the BCG 'Executive Summary marked As at
21 February 2020'—the very day the final review was handed to government—explicitly made a recommendation for privatisation:
More specifically, from across the broad range of possible reform options for AusPost, BCG recommends that the following actions be undertaken:
(1)
Implement a set of near-term efficiencies…
(2)
Streamline the post office network…
(3)
Set out a path to reform the Letters business…
(4)
Establish a clear process to guide AusPost's strategic direction…[and]
(5)
Take a range of steps to optimise AusPost's capital structure, including exploring potential divestitures of specific subsidiaries (e.g. Star Track Road Express, SecurePay).
9.69
Questioned about the evidence on whether BCG made a recommendation for government to explore potential divestitures, representatives of BCG denied that they made an explicit recommendation of privatisation in the final Review.
9.70
This is despite the clear evidence that the 20 February 2020 presentation on the Final Review to the Board considered that exploring divestment was 'prudent' for the government to consider; and that the same matter was clearly cast as one of the 'recommendations' in the Steering Committee in December 2019 and also the Final Draft of the BCG 'Executive Summary marked As at 21 February 2020'.
9.71
BCG confirmed that the option to 'streamline' the network by closing 106 offices would translate to a significant reduction of positions, of 'between 590 and 1,045 roles', some of which could be redeployed in other growth areas of Australia Post.
9.72
Regarding the contention that the government was consciously seeking views on the privatisation of parts of Australia Post, while there is no evidence that the government did so, there is also no evidence that they ruled the option as out-of-scope for the review. This at least suggests privatisation was on the table as a potential financial reform to ensure the financial viability of Australia Post.
Committee view
9.73
It is undeniable that the Shareholder Ministers were unaware that the BCG Review was examining the financial benefits to government of privatising the parcels role of Australia Post. The committee notes that Department of Finance evidence shows that senior officers of the department participated in the Steering Committee, as did two senior advisers for the Shareholder Ministers, including the Communications Minister's Chief of Staff. The Department of Finance also noted that:
The Minister for Finance and the Minister for Communications received written and verbal briefings throughout the period of the Review of Australia Post, from November 2019 to February 2020.
9.74
Regarding the question of whether Australia Post was conscious of the consideration being given to the privatising of parcels, the committee also notes the presence of two senior Australia Post employees on the Steering Committee, which met six times over the course of the BCG Review, including the current Acting CEO, Mr Boys.
9.75
Approximately a month after the government received the BCG Report, on
30 March 2020, the then Minister for Finance, former
Senator the Hon Mathias Cormann, sent a letter to the Chair and Board of Australia Post, which made it clear that the government expected Australia Post to incorporate the BCG proposals in developing its corporate
plan—presumably including any privatisation models:
We thank you for your assistance during the review and look forward to continuing to work closely with the board and Australia Post as you manage the effects of Covid-19 on your workforce, your customers and the business, and through the upcoming corporate plan process. As an initial step, we envisage that BCG's finding should be taken into account as the corporate plan process is developed as we work together to support Australia Post's ambition for transformation.
Board consideration of BCG proposals
9.76
The committee has some concerns that the Board has either failed to adequately discuss proposals that were canvassed in the BCG Review handed to government on 21 February 2020, particularly the proposal to divest the Parcels business, or failed to be fully transparent about its consideration of this proposal.
9.77
These concerns are not based on an assessment of the merits of BCG's recommendation for part-privatisation to be considered by the government, which is discussed earlier in the chapter. Rather, these concerns are based on evidence—or lack thereof—that suggests the Board may not have adequately applied the due diligence that is incumbent on it to discuss a matter so important for the future of the organisation.
9.78
Regarding privatisation, Mr Di Bartolomeo, the Chair of the Australia Post, told the inquiry that:
I can confirm to the committee that it [privatisation] has never been discussed by the board.
9.79
Several Board members concurred that privatisation had never been discussed at Board meetings. Some also voiced their strong opposition to the prospect of privatising or part-privatising Australia Post. As Mr Ronaldson categorically stated to the committee on both matters:
The board has never discussed privatisation. We've never been asked by the shareholder ministers to discuss privatisation. And, as one of my colleagues said earlier, it would have a snowflake's chance in hell of getting up.
9.80
The committee received evidence that on 20 February 2020, the Board received a lengthy presentation on the BCG Review, which includes a recommendation that the divestment of the profitable parcels area of Australia Post was a 'prudent' reform option for government to consider.
9.81
The committee notes that the Ministerial announcement for the commissioning of the BCG Review suggested it was to 'inform the incoming Chairman' and the Board. The committee also notes that in March 2020, former
Minister Cormann wrote to the Chair, asking that 'BCG's finding should be taken into account' in Australia Post's planning for its corporate plan and strategic direction.
9.82
Despite clear guidance on how the Board should approach the findings of the BCG Review, the Board has informed the committee repeatedly that it did not discuss the critical question of divestiture.
9.83
If this is so, it should have been. As a potentially significant matter to the future purpose, capacity, and financially sustainability of Australia Post, divestment of any part of the business should have been discussed by the Board as part of its deliberations.
9.84
To not do so seems to the committee to be an abrogation of the responsibility of the Board to adequately exercise principles of good governance in overseeing and guiding the strategic direction of Australia Post, as they are required to by the Australian Postal Corporation Act 1989 and the Board Charter, as well as the Public Governance, Performance and Accountability Act 2013.
Opposition to privatisation
9.85
Many stakeholders expressed a strong opposition to the privatisation of all or parts of Australia Post, including regarding the profitable parcels area identified for potential divestment by BCG. This included members of the Board and the former CEO.
9.86
Speaking for the Board of Australia Post, its Chair, Mr Di Bartolomeo, commented: 'There are no plans for privatisation. Instead, our strategy is to invest, to grow the business'.
9.87
Mr Nutt set out the rationale behind his opposition to the privatisation of Australia Post:
I support 100 per cent public ownership. I don't support any divestiture of Australia Post assets. I don't support privatisation. I don't support the breaking off of something very important like the parcels business… It's bad public policy because, if you divested parcels, you would put an enormous financial hole in the finances of Australia Post… Secondly…it would affect LPOs, it would affect jobs, it would affect Australia Post's capacity to do everything it is expected to do in terms of community service obligations. So it's a bad idea, bad policy and bad finances.
9.88
Ms Holgate set out the rationale behind her opposition to the privatisation of the Parcels business of Australia Post, based not only on Australia Post's value to Australians, but also looking to the failures of privatised models overseas:
I think we can just look to the UK model, which split out parcels and privatised it and left the post offices behind. The post offices went bankrupt, and I am sure you are very aware of the multiple legal cases they had to take against the government. That is No. 1. No. 2 is that, most importantly, this is a national asset that is critical to the infrastructure of our country, particularly for rural and regional Australia. We are one of the largest employers. Almost 100,000 families are dependent on employment at Australia Post: 80,000 including our direct contractors and about another 20,000 more through people who primarily work for us. We know that, for every person we employ, there are two more jobs in the economy, so, when you take down one Australia Post person, you're taking three jobs away. That is a massive negative impact.
9.89
Ms Cramp told the committee that she had heard rumours and 'inside information' of potential moves towards privatisation under the previous CEO, Mr Ahmed Fahour. In particular, she noted under Mr Fahour's leadership there was increased routing of parcels through the Australia Post subsidiary StarTrack, which she suggested would be easy to 'cut off' and sell as a profitable business.
9.90
Despite reassurances from Australia Post, some stakeholders voiced concerns that privatisation lay behind some recent regulatory, policy and organisational decisions. For example, Mr Rayner of the CEPU suggested that the introduction of temporary regulations signalled the government's intention to eventually move to a full or partial privatisation of Australia Post:
At the time the regulatory relief was introduced, we warned that the changes to letter delivery, the reduced community service obligations and especially the different treatment of parcel delivery under the regulations were almost certainly the beginning of a process of softening up the community for a full or partial privatisation of Australia Post. Critically, the changed arrangements for parcel deliveries under the regulations point unmistakably to an agenda within the Australia Post board and the government to divest the parcels business—that is, to sell it off to the private sector—as the BCG report recommends under one scenario.
9.91
Ms Muscat of the CPSU told the committee that:
Our members are deeply concerned about the potential privatisation of Australia Post and the negative effect it will have on their job security. This is compounded by the unnecessary actions made by Australia Post under the pretence of a response to COVID-19, which now appears to have been part of their underhanded plan to privatise the parcels and financial services areas of Australia Post.
9.92
Some witnesses observed that privatisation would have a disproportionate effect on regional and rural communities, including difficulties accessing services, higher prices and longer delivery times. This is discussed in the following chapter of this report.
9.93
Over the course of the inquiry, Australia Post announced the hiring of a new CEO to commence in September 2021, Mr Paul Graham, who is currently working for Woolworths. Some stakeholders expressed some concern about what this signals for the future of Australia Post. For instance, Mr Murphy noted his concern that the incoming CEO had a history of rationalisation of businesses. Ms Muscat shared these concerns:
We are concerned that the new CEO may…move towards the privatisation of Australia Post. Given the way that Australia Post has acted over the last eight months in particular, in terms of our members and [Australia Post's] lack of interest in providing members tangible protections around their jobs, we are very nervous about what the future of Australia Post might look like.
9.94
Although Australia Post's board members deny that the reduction of services leading to privatisation of parts of the business was on the corporation's agenda, it is difficult to square this assertion with pricing decisions that can only reduce the volume of mail, especially unaddressed mail.
9.95
Printing and packaging is the largest manufacturing industry in Australia, with 130 000 employees, and UMS creates business opportunities for Australia Post. As an essential community service, Australia Post should take account of the consequences of its pricing and procurement decisions on its industry stakeholders.
Influence of the BCG Report on Australia Post policies
9.96
Some commentators suggested that the Australia Post request for regulatory relief was inspired more by the cost-saving measures outlined in the BCG Review, rather than as a response to the pressures of COVID-19.
9.97
The Department of Finance submitted that 'the BCG review was used to inform Government's consideration of Australia Post's request for temporary regulatory relief in response to COVID-19'. However, in answers to questions on notice, the department commented that the Review:
…was focussed on enabling Australia Post to operate as a sustainable and fit-for-purpose service provider, in anticipation of trends that were expected to continue over many years. COVID-19 however resulted in a sudden and significant impact on Australia Post's operations. The sustainability of the business during this time was a key focus for Australia Post and for the Government. The consumer and business behavioural changes observed at the start of the COVID-19 pandemic accelerated the pace of change, at a magnitude equivalent to several years of change. While this was consistent with some of the trends that were anticipated by BCG, COVID-19 entailed additional unanticipated impacts such as severe disruptions to air and road freight networks.
9.98
Evidence provided by Australia Post's Board suggests that its access to the final Report was limited and that it had not influenced its decision-making in seeking regulatory relief. Ms Holgate shared this view, but did not speculate further on the government's use of BCG findings to inform regulatory changes:
Whether the review conducted by the Boston Consulting Group in the 2019/20 financial year was a relevant consideration to making those changes [the temporary regulations] is a matter for Government, however the request for Temporary Regulatory Relief was not based on that review.
9.99
Mr Murphy attributed many of the current policy changes to Australia Post's operations to the recommendations of the BCG Report:
All of the cuts in Australia Post at the moment—whether it be farmers not being able to send their perishable goods, changing work hours, cutting back on overtime and the number of Sundays worked, and not picking up mail on Sundays—are related to the BCG report.
Committee view
9.100
This chapter has considered the future of Australia Post, based not only on statements and strategic forecasts from the organisation itself, but also in light of the information received over the course of this inquiry.
9.101
Australia Post is clearly facing profound challenges, from declining trends in letter volumes, from competitors in the growing parcels market, and in realising fully the promise offered by its growing financial and identification services. While the challenges on these fronts are clear, the significant opportunities they offer Australia Post, the government, the business sector and the Australian people are also evident.
9.102
The massive growth of e-commerce and online shopping is a big potential source of revenue for Australia Post in the future, as well as a way in which it can assist the growth of Australian businesses and a healthy consumer market. In this regard, the committee sees it as essential that parcels remain an intrinsic part of Australia Post's services and business model into the future.
9.103
It is also clear that the deal struck in relation to Bank@Post services in 2018 has also ensured the financial viability of much of its regional and rural LPO network, and strengthened their role in the communities they service. Sustaining and growing this and similar services should be a core part of Australia Post's future business model.
9.104
The committee acknowledges that Bank@Post is a vital part of the Australia Post business going forward and is particularly important in regional and rural areas. The committee is also aware that the negotiation of the deal in relation to Bank@Post took considerable effort and resources for Australia Post and the deals with individual banks are required to be renegotiated on a regular basis, and that stakeholders such as the LPOGroup have expressed concern over the uncertain future of Bank@Post.
9.105
The committee is of the view that the Australian Government should investigate options available to the government to ensure the future of the Bank@Post.
9.106
The committee recommends that the Australian Government consider requiring authorised deposit-taking institutions (ADIs) to allow Australia Post to process basic banking transactions for their customers as a condition of their licence; and that fees be levied on ADIs that are sufficient to cover the cost to post offices of providing this service.
9.107
However, alongside these significant opportunities for growth, evidence provided to this committee shows Australia Post faces far more serious challenges than external factors of letter and parcel trends, and the realities of competitive markets, namely:
a government that has run down Australia Post's standards, staffing and services, has not consulted stakeholders on significant policy or regulatory changes, and which seems to have been working towards the privatisation of the profitable Parcels business, which would effectively gut the long-term financial viability of the organisation;
a Board that lacks sufficient independence and robustness to act in the long‑term interests of Australia Post, rather than reactively responding to the short-term interests of its Shareholder Ministers; and
a senior executive that has endured uncertainty, particularly with the shambolic replacement of a widely acclaimed CEO that turned around the bottom line of Australia Post's business revenue, with an incoming CEO not commencing until September 2021.
Australia Post as a strong Public Enterprise
9.108
Underlying the turmoil and anxiety caused to Australia Post staff by the ADM, and disputes between the corporation's Board and former CEO Ms Holgate over future directions, is a deeper question: what makes this GBE unique?
9.109
Australia Post is not just a business that happens to be owned by the taxpayer. It is owned by the taxpayer because it provides a basic service to the community that the government needs to underwrite and guarantee, and which would be at risk if the corporation were ever to be privatised, even in part. That is why it should remain in public ownership.
9.110
Some in the community will use Australia Post's services more than others, who might be able to afford private couriers instead. But all of us will use Australia Post at some time, and many Australians depend on it. The widespread use of electronic mail and the increase in parcel deliveries resulting from online shopping have not eliminated the need for traditional postal services. Some people, especially in older age groups, do not have internet access, and physical mail services are still required for many official purposes.
9.111
Australia Post brings all of these services together through a unique network of offices, agencies and local posties that binds Australians together. This network not only continues to fulfil its traditional role but, because of that role, has been able to provide new forms of community service also. A notable example is the provision of banking services in communities that the larger banks no longer serve. Market logic alone might dictate the closure of bank branches; but experience in other countries, and now in Australia, has shown that banking services do not have to be provided only through branches of a large bank. Postal outlets are well-suited to providing these services too.
9.112
The network that binds Australians through the activities of Australia Post is mapped by the postcodes that define where each of us lives, but it is not reducible to this set of numbers. It is also about human interaction. The unions who gave evidence to the inquiry spoke of how posties get to know not only the homes and businesses to which they deliver, but also the people who live and work in them. For some people who are old and live alone, and may suffer from ill-health, the postie may be their most regular human contact. This is a service that postal services in some other jurisdictions have not only acknowledged but institutionalised: Irish posties are required to make occasional checks on the welfare of those who live on their round.
9.113
If Australia Post were to follow the example of its Irish counterpart, it would need to be properly resourced and funded to do so. It is not a service that any private courier would undertake, because it almost certainly could not generate a profit. Yet there is no doubt that, despite the connectedness supposedly provided by the internet, the need for direct human contact endures. If a postie on the public payroll provides that contact, it is further confirmation of Australia Post's unique place in the community.
9.114
That uniqueness has always been understood by Australians across the political spectrum. As Australia Post Non-Executive Director Mr Nutt said in evidence to the committee, quoting the Liberal founder Robert Menzies: 'You don't have to be a socialist to think that the Government should own the post office'. Only those who are so ideologically blinkered that they think markets can satisfy all human needs could doubt that.
Building a strong public postal service for the 21st Century
9.115
The committee's inquiry has highlighted that Australia Post has been unable to strike the balance between public accountability, efficiency and its CSOs. Australia Post is an organisation that is central to the political economy and social fabric of the nation.
9.116
However, it is clear from the evidence to this committee that for some time Australia Post has allowed a culture to develop which has side stepped consultation collaboration, which has supressed Australia Post's ability to be a strong public postal service of the 21st century.
9.117
As part of a cultural change program, the committee is of the view that Australia Post must change the way it consults and collaborates, and with whom.
9.118
Australia Post must return to a culture of meaningful consultation and collaboration in good faith. As a public enterprise it must have, at a minimum, a tripartite model of consultation that brings Australia Post, government, business and unions to build a strong public postal service for the
21st Century.
9.119
It is the view of the committee that, as part of this cultural change, Australia Post should establish an Innovation Council to promote dialogue and develop long-term strategies for boosting innovation and productivity.
9.120
An innovation council would look to make Australia Post more productive and more competitive, increasing its capacity to find new markets, with new technology and find new ways of doing business whilst building developing high skill employees with strong community service obligations.
9.121
The committee recommends that Australia Post establish an Innovation Council formed on a tripartite basis that brings government, business and unions together to build a strong, productive and competitive public postal service with stronger community service obligations.
Privatisation of Australia Post
9.122
The committee has examined the question of whether the government was considering the privatisation of Australia Post, particularly its profitable parcels services. The evidence suggests that the government at the very least had not ruled it out-of-scope for the BCG Review of Australia Post's financial sustainability—and thereby were open to potential privatisation models. At the worst, it seems that the government was secretly working towards selling‑off Australia Post's profitable parcels service, for a short-term financial gain that would have disastrous effects for Australian consumers, businesses, and employees of a valued and trusted Commonwealth asset.
9.123
This intent is clear in evidence obtained by the committee relating to the secret BCG Report. As noted above, the Executive Summary prepared for an 11 December 2019 BCG Review Steering Committee meeting, asked whether parcels should be 'divested', and whether Australia Post stocks should be sold off in an Initial Public Offering. This same meeting noted the possibility of running down services in parcels for regional and rural Australians as a cost‑saving measure, which was still being considered at the Steering Committee meeting a week later.
9.124
The proposal for privatisation was still in the BCG Review's recommendation on 20 February 2020, the day before the report was finalised, when the Board was given a preview of the final report. This set out a blueprint for reducing the quality and accessibility of services with an eye to eventual privatisation. This document clearly states: 'BCG believes it is prudent for Government and AusPost to undertake more fundamental, sequenced reforms…[including] Exploring the potential for a divestiture of Parcels.
9.125
More importantly, the final report explicitly made a recommendation for privatisation: 'BCG recommends that [the government and Australia Post should]…Take a range of steps to optimise AusPost's capital structure, including exploring potential divestitures of specific subsidiaries (e.g. Star Track Road Express, SecurePay)'.
9.126
The government has denied setting a privatisation agenda or knowing about the deliberations of BCG, even when two senior advisers from the offices of the two Shareholders Ministers were participants in the Steering Committee.
9.127
It appears that the government has tried to distance itself from the suggestion that privatising Australia Post is on its agenda, once the intentions of the secret BCG Review were exposed. However, this is not merely a change of heart on its part; rather, it seems more to do with the political difficulties of developing and implementing a policy that would close at least 213 post offices, lose nearly 8000 jobs, and impact vulnerable Australians, particularly in regional communities.
9.128
If the government genuinely did not want BCG to consider the privatisation of Australia Post, then privatisation should have been ruled out-of-scope from the start of the Review.
9.129
Many Australians remember the Abbott Government's Commission of Audit, delivered soon after Coalition came to power in 2013. It recommended the privatisation of Australia Post, which the then-Treasurer, the Hon Joe Hockey refused to rule out-of-scope before his disastrous Budget of 2014.
9.130
This inquiry has made it apparent that this sentiment still sits beneath the surface of the government's agenda, even if it understands it is politically unpalatable. The government knows how Australians feel about the potential gutting of their trusted and valued postal network. That is why it refused to release the BCG report and why it continues to progress its reform agenda without genuine consultation.
9.131
The committee recommends that the Australian Government immediately release the Boston Consulting Group Review of Australia Post's Financial Sustainability.
9.132
The committee recommends that the Australian Government expressly rule out privatising or divesting of Australia Post, or any of its services, including parcels.
9.133
The committee recommends that Australia Post review its procurement principles and seek to incorporate sections of the Commonwealth Procurement Rules into these principles, particularly relating to local content of purchases.
The future of parcel deliveries
9.134
Evidence received by the committee unanimously recognised that the delivery of parcels is a core and growing part of Australia Post's services. With the massive recent growth of eCommerce, and Australian consumers and businesses increasingly turning to the online marketplace, this outlook is set to continue, even with the challenges of other providers.
9.135
This has been recognised across the board: by the government, by Australia Post itself, by BCG and other consultancies who have analysed the market, and lastly by consumers and businesses, who have driven this trend.
9.136
Given this universal recognition of the importance of parcels to Australia Post's services and ongoing financial security, the committee considers that the government should embed a parcel provision within the Australian Postal Corporation Act 1989, and associated performance standards. This would not only bolster Australia Post's future financial security, but also ensure that all Australians are able to access and afford an effective parcel delivery service.
9.137
The committee recommends that the Australian Government bring forward amendments to the Australian Postal Corporation Act 1989 and associated regulations, to incorporate parcel-related benchmarks in Australia Post's community service obligations and performance standards, to ensure parcel services are affordable and equitable for all Australians, and that parcel delivery remains a core element of Australia Post's services. In developing these amendments and associated regulations, the committee recommends that the government and Australia Post consult a wide range of stakeholders, such as business, employees and their representatives, and interested communities, including those representing regional and rural Australia.
Addressing Australia Post delivery standards and services
9.138
The regulatory relief temporary arrangements are expressly designed to make deliveries more infrequent and speeds of mail transport slower. They are similarly designed to reduce cost for Australia Post, while having the effect of increasing the workload and uncertainty its employees face in doing their job.
9.139
These regulatory amendments were introduced by the government in 2020, at the request of Australia Post, under the guise of adapting to the pressures of the COVID-19 pandemic.
9.140
However, evidence presented to this inquiry, as well as to the Legislation Committee's inquiry of 2020 and received through the Estimates process, shows that the government was considering significant cuts to Australia Post in 2019, well before the COVID-19 crisis hit. Additionally, many stakeholders suspect that the government will extend the 'temporary' changes significantly, or seek to make them permanent.
9.141
In this regard, it was widely observed that the regulatory loosening of CSOs and Performance Standards align remarkably to the cost-cutting recommendations of the BCG Review, rather than any real need to manage the effects of the pandemic. Indeed, the BCG recommendations handed to government in February 2020—well before the pandemic had unfolded in Australia—foreshadowed the regulatory relief requested by Australia Post, and granted by government.
9.142
For example, the BCG Review specifically canvassed the options of moving to alternate weekday deliveries, removing priority mail, and slowing the required delivery speed stipulated in performance standards. Along with the significant fiscal savings to government, BCG also noted the significant job losses this would create, as well as the negative effects for users of postal services, LPO licensees, employees, and the lost value for receivers waiting longer for their mail.
9.143
What the BCG Review did not foreshadow was losses to Australian businesses, poorer outcomes for users and consumers, and the difficulties faced by employees who face uncertainty in employment, and have increased workloads.
9.144
The regulations are due to end on 30 June 2021. The government has signalled that it will consult with stakeholders on how the regulations have been implemented and their effects, before considering any extension beyond this time. The committee notes that the evidence suggests that this consultation has not yet been undertaken, and that there is a great deal of uncertainty over the government's intentions in the future.
9.145
The committee recommends that:
the Australian Government publicly release the reports or final findings of the Boston Consulting Group relating to the ongoing impact of COVID-19 on Australia Post's business, including any evaluation of the efficacy of the temporary regulatory relief; and
Australia Post release the findings of the McKinsey report into the development of forward-looking delivery network strategies and plans for Australia Post.
9.146
The committee recommends that the Senate oppose any extension to the temporary regulations now in force.
9.147
The committee recommends that the Australian Government consult widely and extensively on any proposed continuation of the current temporary regulations or introduction of any future regulatory changes, including with post users, businesses, licensees, and employees, contractors and their representatives.