Anne Ruston (SA, Liberal Party) Share this | Hansard source

I present the report of the Senate Environment and Communications Legislation Committee on Australia Post, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

As the chair of the committee that held this particularly important inquiry into Australia Post for the last couple of months, it is a great pleasure to hand down the consensus report today. There was absolutely no doubt amongst the people who were involved and who gave evidence—and to the committee at the end of the inquiry—that the Australian postal network now finds itself in a massive state of change. There is certainly no doubt that electronic means for communication is substituting letters, that internet substitution for across counter transactions is significant and that there is an increase in parcel mail due to the online environment. So we see the Australian postal network operating in an extraordinarily changing environment and this is having a major impact on the operations of Australia Post. We have seen a decrease of one billion letters over the last five years. We have seen an explosion in the number of parcels that are delivered by this network.

Unfortunately, in the first half of this calendar year we saw Australia Post post a half-year loss for the first time in its corporate history. What we do need to remember though is that Australia Post is not a private business. Australia Post is a monopoly. It is a monopoly that heads a very complex network of operations that make up the Australian postal network. It is made up of Australia Post, Australia Post post offices, licensed post offices, corporate post offices and franchisees. It is also very much intrinsically engaged in every way with the Australian public. Therefore, we had to look at this particular issue through the prism that the Australia Post network is such an integrated part of everyday Australian life.

The hearing was instigated initially by a number of licensed post offices, who came to the Senate as a last resort because, no matter how hard they tried, they found that they were just not able to find any reprieve in the market they were operating in. They claimed that Australia Post's behaviour was having a detrimental effect on their profitability. We have to remember that because Australia Post is a monopoly and not a private business it has a number of community service obligations that it has to deliver to the Australian public. For instance, I think all of us know that it has to deliver mail to the majority of Australians on a reasonably regular basis at a reasonably uniform rate. It does this by using this extraordinary network of licensed post offices, corporate post offices and the franchisees. The ability of Australia Post to deliver its community service obligation is predicated on this network. This very network, particularly the licensed post offices and the franchisees, came to us and said that the behaviour and activities of the Australia Post were having such a detrimental impact on their capacity and ability to be financially viable that they were struggling to keep their doors open. This was of extreme concern to the committee.

In summary, the concerns that were put to us were that these licensees and franchisees were struggling to recover the costs that they were incurring to provide the mandated Australia Post services. We have to remember that Australia Post in this space does not operate in a competitive environment. Australia Post, because of its position, does have the capacity, to a large extent, to dictate the prices of these mandated services. As a consequence, the assets of these licensees and franchisees have dropped significantly in value—because, of course, when you attempt to sell any business, the profitability of that business is one of the major factors that you consider as to the value of the business—and that was somewhat exacerbated by the bad publicity that has surrounded this very unfortunate situation that was allowed to occur.

Another concern that was expressed was the lack of consultation being undertaken by Australia Post in this extraordinarily changing environment and the fact that they were taking quite a dictatorial approach to how they drove the changes and the things that were happening, instead of a more consultative approach that allowed the various players to have their say, express their concerns and be listened to in this marketplace.

Another concern that was put on the table was the predatory behaviour of Australia Post, particularly in relation to the marketplace—because, of course, we have Australia Post postal offices as well as licensees and franchisees. Australia Post needs to be very careful, because of its obligations, that it does not actively seek to poach the business of its licensees and its franchisees to the benefit of its post offices—and there was concern that this activity was happening in the marketplace.

Another concern put to us was the fact that Australia Post is obliged to only consult with the Post Office Agents Association in determining the pricing of the activities that the licensees perform on behalf of Australia Post. The licensees were concerned that they were not being well represented in this space and did not believe that their best interests were being represented by this body in its negotiations with Australia Post.

I would like to quickly mention, specifically about the franchisees, that we have a real concern that Australia Post had provided what we thought was false and misleading information to the franchisees when they negotiated their original agreements to take over the franchises, because Australia Post was in possession of information that it reasonably should have made the potential franchisees aware of. As a result, we saw a much smaller number of franchisees in the marketplace, and this created a much smaller pool of franchises, which, of course, diminished the value of the assets of these franchisees.

The committee heard many concerns raised by a lot of people, so the committee has made a number of very substantial recommendations. We believe that Australia Post and the rest of the postal network, including the licensed post offices, the corporate post offices, the unions and everybody involved in this space, need a networking strategy group put together so that we can manage and inform the changes that need to take place to make the Australian postal network a viable operation into the future. We believe that the dispute resolution mechanism could be significantly improved. We think that there needs to be an audit to determine that the payments being made for these services are fair and reasonable. We believe that Australia Post must be held to account and that its monopoly position cannot be used to abuse its market power. We think that Australia Post must not be able to transfer its liabilities to the licensees and franchisees, because they are in no way able to defend themselves in this space. Most particularly, we believe that all of these things have to happen as a matter of some urgency. These issues have been going on for too long and we need to resolve them as a matter of some urgency so that the people who have entered into these agreements in good faith can get on with their lives.

Finally, I would like to thank the committee secretariat, particularly Christine McDonald. This has been a very long process. It has taken a lot longer than any of us would have imagined it would, but, considering the extraordinary significance and relevance of the information made available to the inquiry, and the fact that so many licensees, so many franchisees and so many people involved in the Australian postal network wanted to have their say at this committee, we made the decision that we would rather hear everybody, get all of the information and try to make sure that this report was absolutely as comprehensive as it possibly could be so that we could reflect the importance and magnitude of the issues brought before us. As you can tell from my comments, we are very concerned that Australia Post needs to play a more proactive role in this space.

In conclusion, the committee recognise the difficulties currently being faced by all stakeholders in the Australia Post network, but we believe that, if we are going to resolve this situation and enable the profitability of all of the players in this space into the future, we must have a transparent and consultative approach to move forward. We need a transition plan put in place that everybody takes ownership of—because the future of Australia Post is important not just to the stakeholders but to every single Australian. I commend the report.