Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Communications. Will the minister update the House on the financial performance of Australia Post? What is the government doing in cooperation with the company to ensure that postal services and post offices around the country are viable for future generations?

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

I thank the honourable member for her question. Australia Post faces a real existential threat. Its letters business is declining year after year. We are now at the point where the losses in the letters business, which have totalled since 2008 over $1½ billion, will shortly overwhelm the profits in the rest of the business. If nothing is done to reform Australia Post, over the next decade the government will have to tip in nearly $7 billion of subsidies. So, plainly, there has to be change, and that is why the company has announced today two big reforms.

The first reform is that the service obligations will be changed so as to allow a two-speed letter service. There will be a regular service, which will be the regulated service, which will arrive generally two days later than it currently does. This will result in a very significant reduction in costs over time. There will be a priority service, which will be delivered under the current timetable but obviously at a higher rate. This two-speed service is comparable to what is already being used by 70 per cent of business customers. The second part of the reform is to increase the price of stamps. The company is seeking to increase the stamp price from 70c to $1. Over the next three or four years, or thereabouts, the letters business should be able to get back into the black, which is exactly where it should be. This is absolutely critical, and I want to acknowledge the way in which the company has consulted widely on this.

Let me make two points about the stakeholders—firstly, the employees of Australia Post. There are 32,500 employees of Australia Post. Obviously there are implications for jobs in these changes. However, I note that the company has a Post People First program; and over the last few years, as jobs have gone from the letters business, 61 per cent of those people have been successfully redeployed elsewhere in the company. The company has a three 'R's policy—retrain, redeploy and then redundancy as a last resort. The company is working very, very closely with the union, whom I met only yesterday with the shadow minister, and is very focused on looking after its employees.

Finally, the licensed post offices, small businesses—there are 2,900 of them—have been doing it tough during this period. Let me say that the company and the government are absolutely committed to the LPOs. These changes, the company assures me, will put about $75 million of extra revenue into the LPOs—about $20,000 each per annum, a significant change. (Time expired)