By Connor Pound
On the 25th of September Australia Post, one of the only monopolies that has achieved undeserved affection, announced that they have finally met with a predictable deficit. Now a lot of people might be annoyed that our beloved Postage service is about to cop criticism on the back of this. After all, what other government entity has, for as long as anyone cares to remember, consistently provided quality AND profitable services?
The answer to that question is none. Unfortunately for anyone asking , that ‘none’ extends to Australia Post. From its inception Australia Post has complacently existed, apparently devout in the belief that letters are future-proof. You will find no innovative ventures to improve the quality of the service; instead they have been able to cosily adopt any technology that arrives. After waiting a few years of course. Don’t get me wrong, it has worked rather well for them. I mean, when you have a government initiative such as the Australian Postal Corporation Act of 1989 protecting your flanks from any greedy business that might otherwise make a jump at the holes you’ve left, that will be the case.
For their part, this year’s loss of $222 million isn’t particularly large in the grand scheme of government. Sure the profits of years passed, like the $116.2 million in 2014, haven’t been awe-inspiring, but when you are a postage organisation whose income chiefly derives from merchandising, that is to be expected. In the past they have also been able to act subsistent by reinvesting any profit. But without railing on about their lack of foresight, the announcement that their workforce will need to be reduced by a further 1,900 employees seems to suggest it was mal-investment more than anything.
It has been said, and it will continue to be said, that the fall of any business that focuses on letters is inevitable. This is likely to be true; Australia Post can’t survive through delivering its monopolised 250 gram and under pieces of paper. But there is a way to save such a time-honoured organisation. Privatisation. To a lot of Australians privatisation is tantamount to cutting off fingers. For some reason no matter how mangled and useless they are, it is better than sticking with what’s broken than changing something that will inevitably become unattached.
But the choice we are facing isn’t between a private company and a government enterprise. The choice is as follows: We can either support a government owned Australia Post until it disappears along with its letters, relatively soon, or we can support a private corporation that has a chance of surviving.
Of course there will be people who hate this idea. They will only call the Australian Post Australian if it’s under the government due to a seeming fear of the ‘corrupting’ tendrils of the free market. However, the benefits of having business savvy, profit relying men and women in the private sector are invaluable for a company that desperately needs reform. Yes, this will likely involve a change of face and a definite expansion away from paper-moving. But this is simply part of what must be done, and will only be done under privatisation.
Without any precedents this opinion falls on deaf ears but it just so happens there are precedents. They aren’t obscure or irrelevant either, we are talking about the failure and success of two of the largest Postal Services in the world; the German Deautsche Post, known to most as DHL, and the United States Postal Service. The former exploded onto the scene after being privatised in 1995 and has since become the world’s largest courier company, retaining a massive Germany-wide letter service and a profit at the same time,through innovation and acquisition.
Unlike the German Post, its American counter-part failed to embrace up-and-coming game changers like the internet and was unable to expand, trapped by its once noble charter. Generating profit at a level equal to most Forbes top 10 companies in the 1990’s, the USPS is now on thin ice; posting a $5.5 billion loss in 2014. Yes, it has stayed true to tradition, but something tells me that many of its employees, customers and executives would happily part ways with that tradition if it meant earning even a fraction of DHL’s €2.95 billion operating income.
For a company operating at a relatively large loss the reforms Australia Post have slated for the coming years are weak. They boil down to two things – only one of which you will hear much about. Firstly, the reinvigoration of the approach towards their online platforms, a move touted as much more influential than it could possibly be. Secondly, the raising of the prices of stamps – a sure fire way to increase profits also an exercise in the self-destruction of the industry. And if these reforms don’t work? Malcolm Turnbull, as Minister of Communications, introduced the alternatives as either “massive subsidies of $7 billion of taxpayers’ funds over the next decade, or abandoning the letters business altogether”. Not a great outlook.
Australia shouldn’t push money into the palms of ageing, crumbling pillar of yesterday’s society.