The future of Australia post will be off the beaten track

In the near future a trip to the Post Office in regional and remote Australia may mean picking up a parcel or a letter. It could also mean a virtual meeting with your tertiary education provider, a virtual consultation with a medical specialist or a discussion with an expert about how to leverage your local products into the Asian market.

Australia Post’s future, including its ownership and business model, has reached a tipping point at the centre of which is the decline in Australians use of the humble letter. Last week the Government took privatisation off the table and a key distraction from the bigger issues for the future of Australia Post is out of the way.

Despite recent ACCC permission to increase the cost of postage from 60c to 70c per stamp, Australia Post something still has to change in response to the sharp decline in letters.

Ultimately, changes to the obligations Australia Post must meet under Section 27 of the Australian Postal Corporation Act 1989 will be needed. Clause 1 in the Community Service Obligation section of this legislation states that ‘Australia Post shall supply a letter service’.

As a result, much of the focus in this debate to date has been directed at the importance and future of regular, affordable letter deliveries. Some, such as Monash economist Professor Stephen King (The NBN makes Australia Post’s privatisation inevitable and desirable, The Conversation) argue that the introduction of the NBN will make the current Community Service Obligation (CSO) on Australia Post obsolete. Others are determined to preserve the status quo.

For me, the argument over letters is a distraction from what is really at stake. The services Australia Post provides to rural and remote communities cannot be neatly replaced by the National Broadband Network (NBN).

Australia Post provides a diverse range of services alongside letters that are vitally important for communication and trade. They are the only possible provider of these services in many regional areas.

Sixty per cent of Australia Post’s 4,429 retail outlets operate in regional, rural and remote Australia. These outlets are often the hub of business activity in small towns.

Australia Post is also the only provider of parcel services in many areas, even though nationally this is a highly competitive market. As an agent for more than 750 businesses and government entities Australia Post retail outlets provide access to services in areas where they are not likely to be replaced by private providers.

Any changes to existing CSOs will have implications for the broader network of outlets and services that Australia Post supports throughout rural and remote Australia. It is important that we consider the impact of these changes across the suite of services before making decisions that will be difficult or impossible to undo.

The services Australia Post provides are also one of a group of communications arrangements (and many other policies) that have been put in place over time to ensure a level of equity in services and communications across our vast continent.

While these decisions are usually made in isolation, they work together to create a level of spatial equality that ensures economic opportunity and similar standard of living is available to all Australians, no matter where they live.

The worldwide trend in demand for letter services suggests that the decline in the need for this service is terminal.

However people will still need to send parcels to each other, get passports and do other things over a counter. I would be surprised if some level of obligation on Australia Post to maintain services in areas the market will not go will be required to guarantee a level of basic service and cost equity in communications.

Importantly, a new approach to the Australia Post business may offer ways to reduce or even eliminate the net cost of services to smaller communities, whilst improving and expanding services outside of the traditional letter business.

As we innovate in health, education and other areas of government, these services have a growth potential we cannot yet measure. Australia Post may be the perfect vehicle for redistributing government and other services back to smaller places around Australia at little or no cost with potentially big benefits in overcoming the divides in service availability and quality around Australia.

There are also unrealised opportunities for regional innovators and entrepreneurs to use Australia Post as a partner in business development and connecting to world markets. Not a week passes when I do not hear about a new regional business succeeding internationally in this way.

‘Australia Post shall supply a letter service’ does not capture the community service needs of the future. Whatever the outcome, it is unlikely that we will conclude that nothing needs to change.

Nevertheless, vocal resistance to change is likely from both urban and regional Australia. But intransigence on the letter issue is more about instinctive resistance to change than anything else. Many regional Australians already survive without everyday letter delivery and have done so for a long time.

Asking people in regions about the services they value now and their expected needs in the future will help to ensure that we bring communities along in the process.

To my knowledge what people in regions value, what they need now and in the future has not been adequately gauged by Australia Post or the government. Certainly what has been presented in the media to date is not sufficient information for such an important decision.

There are options for change that are high value. If the perspectives of Australia Post customers (i.e. all of us) are at the centre of the next version then it is likely that Australia Post and the Government can put a proposal for change on the table that will receive widespread support.

If we get this right it will leave us all better off in the future, no matter where we live.

This article was originally published by The Conversation. To see the article click here.