Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Communications. I remind the minister that post offices provide key services to communities in my electorate and in other rural and regional areas. How is the government helping Australia Post to ensure the sustainability of rural and regional licensed post offices?

Malcolm Turnbull (Wentworth, Liberal Party, Minister for Communications) Share this | Link to this | Hansard source

I thank the honourable member for his question and note his very keen interest in this issue. Yesterday, Australia Post launched a rural sustainability package to support its licensed post offices. This is the latest in a series of initiatives that will contribute an additional $40 million a year to ensure the sustainability of the licensed post office retail network, and that is on top of $320 million paid annually to these licensees. For the first time, an additional 432 licensed post offices, almost all of whom are in rural and regional Australia, will be provided with access to Australia Post's electronic point of sale system, and it means they will now be able to deliver and get paid for additional services such as electronic payments and banking services.

There are 2,550 licensed post offices, of which about two-thirds are in rural and regional Australia. They have been doing it tough because the economics of the post office has been worsening. I want to acknowledge the great work that is being done, sometimes to the discomfort of Australia Post and, indeed, to the minister by the Senate Environment and Communications Committee, chaired by Senator John Williams and vigorously encouraged by Senator Boswell, who is, of course, retiring at the end of this month. The challenges facing Australia Post are very significant. It is a very high-fixed-cost business. The letters business is a very high-fixed-cost business and every year letter volumes are declining. Every time there is a dollar less spent on letters, it is in excess of an 80c hit to the bottom line of the post office. As a result, about a billion fewer letters have been sent over the past five years. In the past two years, Australia Post has recorded a combined loss of more than $400 million in its regulated letters business. That trend is going to accelerate. It is expected that letter volumes will decline by about eight per cent each year into the future. Australia Post now forecasts a loss of more than $300 million in its letters business next year. The consequence of that is that, while it has a profitable retail business and a profitable parcels business, by next financial year it is expecting to record a total company loss because of the losses on letters overwhelming the profits on parcels. There is a widely-held view that the parcels business is growing so fast that it will overtake the losses in letters. That is simply not right. So there are big existential challenges for Australia Post. We are taking them on. We are looking at reform. We are looking at all the options. We are working hard with the management to ensure that it continues to deliver a relevant and sustainable service to all Australians.

Tony Abbott (Warringah, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I ask that further questions be placed on the Notice Paper.