No Crisis at Aussie Post says The Australia Institute Report

The union representing Australia Post employees has released The Australia Institute report that shows Aussie Post is very profitable and that mail volumes are not falling anywhere near what is claimed in a recent analysis by the Boston Consulting Group (BCG).

“The Australia Institute report shows that Aussie Post is still very profitable and that there is no evidence that the cost of delivering the mail to Australian homes and businesses will exceed the large profit it makes from its parcel and retail business,” said Martin O’Nea, National Assistant Secretary of the Communication Workers Union.

“Last year Australia Post made a profit of around $600 million from its parcel and retail business while they claimed it cost a little over $200 million to delivery ordinary mail,’ he said.

"Is Australia Post really saying that in one year the cost of delivering ordinary mail has blown out by $400 million or that the profits from its retail and parcel business have collapsed by $400 million,’ said Mr. O’Nea.

The Australia Institute report shows that:

Australia Post made a profit before tax of $402.8 million in 2012-13, has recorded profits of more than $1.5 billion in the last five years and paid dividends to the Commonwealth of almost $1 billion.
The BCG report’s narrow focus on the costs and revenues allocated to the letter delivery services of Australia Post paints an unduly negative picture as it largely ignores the rapid growth in the highly profitable small parcel business which relies on many of the network services provided by the letter delivery network.
BCG’s forecast annual decline in letter volumes of 8-11% is much too pessimistic given that the decline in mail volumes in Australia has been an average of just 5 percent each year over the last four years, and an estimated 4 percent for this year.
BCG’s comparison of Australian postal services with examples from other countries is based on selectively using the worst results from western European countries and has the effect of exaggerating the projected rate of decline in mail volumes in Australia.
The cost of delivering mail has been overstated by Australia Post and BCG.

Australia Post’s most recent annual report said that “Our Parcel and Express Services business grew from strength to strength this year returning a profit of $354.8 million (up 29.1 per cent this year, or 13.1 per cent excluding StarTrack). Underpinning this result was growth in domestic parcel volumes of 9.3 per cent…”

“How can they now turn around and say the business is about to lose money,” asked Mr. O’Nea.

“Australia Post has recently argued that the delivery of letters at current standards is ‘unsustainable’, but in fact the delivery network used for letters is actually the foundation on which the rapidly growing, and highly profitable, small parcel delivery business is based,” he said.

“Before any changes are even considered to the daily mail service there should be a full public consultation process so the community and the businesses that rely on Australia Post can have their say,” Mr. O’Nea said.

Media enquiries: Genevieve Wauchope 0431 465 952 or Martin O’Nea 0408 208 363