Senate Environment and Communications Legislation Committee [Part 2], , 3:32:24 to 3:49:41
Discussion covers post office closures, the viability of Licensed Post Offices, and the proposal for a public 'people's bank'. Australia Post rejects competitor proposals for last-leg delivery access to its regional network.
Topics: Infrastructure, Social services
Speakers: Mr. Paul Graham, Senator Malcolm Roberts, Mr. Josh Bannister, Senator Nita Green, Unknown Speaker, Speaker 1
>> Thank you, Chair. Thank you for appearing again tonight. >> There have been six inquiries into various aspects of Australia Post in the last six years. Yet, the future of rural and regional Australia Post outlets is no more clear, let alone secure. Liberal, National, and Labor Greens governments, it makes no difference. The agenda keeps rolling. Now, we have inquiry number seven coming up, which I'll ask you about in a minute. Across the last six years, the number of post offices has reduced by 208. So, Mr. Graeme, how many post offices are due to close in the next 12 months or and in the next 6 months before you leave?
>> Uh, thank you, Senator. Currently, as I uh said here, uh we have three uh post offices that we've announced the closure of. Uh we don't have any uh other post offices that I'm aware of that are in uh relation to uh being closed. As I've said before uh at the estimates uh we do not control the lency network and unfortunately uh we do see from time to time licences uh provide virtually no notice and close up shop various conditions illness dispute with the landlord etc. Uh but as I sit here today uh we have three post offices that we've already announced that will be closing. Uh and uh we do not have any other post offices in the next 6 months that I'm aware of. Uh putting aside those that could be decided by the lency
>> Have you ever reopened a post office
after closing it? Uh we have uh reopened a number of post offices uh that have been closed uh and uh we opened I think 14 post offices last year new post offices. Uh so uh each one uh is judged on its merits and in relation to uh the needs and services that that community requires. Uh, as I said in my opening statement, our goal is to preserve the 4,000 post offices that we are regulated to provide and particularly the two and a half thousand in regional, rural, and remote. uh and uh we are committed to doing that and indeed uh by providing an extra $30 million in commissions uh for uh those LPOS in those regional and rural remote areas uh because they are saying seeing a decline in foot traffic and a decline in the traditional uh usage that uh customers have for post offices.
>> Could you give me on notice please the number of post offices that have closed since in including 2000 to 2026? Yes,
Senator. I believe that we've issued a similar uh response before to AON and we will certainly provide that to you.
>> And the number of post offices reopened and the number of new post offices that were never that were never in in operation before.
>> Yep, we can provide that information.
>> 2020 to 2026. How many new post offices serving new residential areas, not rebuilds, new post office opened in the last 12 months, and how many more are planned?
Uh >> I'd refer to Mr. Bannister who runs that network. I can say for example Orin Park in western Sydney is a new one that we've opened a large growing area of young families uh and again working with local member parliament and the local community uh you know we saw the need to put in a full service post office and we've opened that post office but I'll I'll defer to my colleague Mr. Bannister.
>> Thank you Senator Roberts. My name's Josh Bannister executive general manager retail brand and marketing. Uh last financial year there were 72 post offices that closed and there was 54 that opened. There was a net reduction of 18. Often a post office will close for unplanned reasons. There are many reasons why a post office may close including a lency choosing not to continue and that may result in a short period whereby uh the post office is not able to uh operate where it previously was. Our team worked tirelessly to replace those post post offices particularly in rural, regional and remote Australia where we know that they add value. At the same time in metropolitan Australia, we are expanding with growth corridors. Uh you think of the north and southwest growth corridors of Sydney. Uh there's obviously huge growth corridors in the likes of Melbourne and Brisbane. Uh and we're actively bringing new postal services. But I will take that question on notice as to the number. uh but the number would be well beyond 20
>> and Ambleley is a good example Senator uh where uh the lency closed short notice uh we were able to put in a very quick temporary solution uh with the local pharmacy uh in relation to providing mail and basic parcel services that has now expanded to uh full licensed post office environment uh and uh that uh means that that town can continue to enjoy those full postal services but it does uh uh uh relate to the unique circumstances of that particular area.
>> Thank you. When an LPO decides they can't remain in business and as a result give the 90-day notice to hand back their license, Australia Post is required, as I understand it, to advertise an urgent expression of interest to find a new lency. How many advices have you received of a desire to hand back? And of those, how many were subject to an expression of interest? And how many resulted in the post office remaining open? Give me whatever period you had. The last 12 months is of special interest.
>> Yeah, I'll take that a notice, but again, I'll defer to my colleague, Mr. Bannister. Uh we always run an expression of interest and have a a detailed consultation uh program for the
>> Yeah, we'll take the question on notice to ensure that we give you the most accurate information for the last financial year. I'd again refer to the 72 that closed and the work that was done by the team to replace as many of those as we could, particularly in regional, rural, and remote Australia.
Thank you. The service mandate for 4,000 post offices does not specify which type of outlet. With two 2/3 of licences looking to retire over the next 3 years, is it your intention to maintain this guarantee by converting full service LPOS to community post offices offering a small subset of post office services and still called yet a post office and for clear clarity the reason is profit.
Uh thank you Senator and uh again our goal is to ensure that the community receives the services that they require. Uh you know we do not make any uh more money by uh uh closing a license e or having a license e closed. Our goal is to meet our 4,000 2 and a half thousand commitment. Uh what we do is we look at the circumstances of that community. What services are they taking uh make making available uh to them? uh and we try and make sure that we are replicating the services that community wants. Each case is quite unique. In metropolitan builtup areas, uh we're finding that a lot of the consumers don't want a full service post office. What they want is 247 access to parcels and therefore uh they want more parcel focused formats or parcel lockers. Uh but we do agree in regional Australia it still is very much the traditional post office. Uh but we do have for example in towns like um uh in Sheperdan we have you know 21 post offices. Uh so there are a significant amount in certain regional towns but our goal when a post office closes is to look at that town look at the needs that that town has and ensure that we can replicate the services that they require both today and also going forward. But as I've said many times in front of estimates, this is becoming an ongoing challenge for licences and I think as you say senator uh you know this has been uh uh communicated over many years uh but we are seeing uh the apex of that I think in the coming years uh due to the ongoing decline in foot traffic for traditional services uh because of digitization uh as well as the aging demographic of a lot of these licences particularly in regional Australia.
The re-imagined concept turns post offices into a retail amusement park, relying on significant foot traffic, limiting the potential outlets and doing nothing to solve the problems of rural and remote community post offices. How will you add profitability meaning long-term v viability to rural and remote post office? >> You said it's difficult.
>> Yeah, thank you Sander. Look, it is difficult and again we have some uh post office in regional areas that flourish and do very well. We have others that are really struggling. That's why
>> have you done any research into the what makes one category flourishing versus stagnating?
>> Uh we we have data a lot of it is is basically the change in nature of how people want to interface with the post office.
>> That varies from town to town.
>> Uh it does. So where we have older demographic uh they find we find that more overthe-counter services traditional services are favored. Where we've younger demographic it is is digital. Uh they want a digital interaction. Uh what we have uh put as part of our uh LPO reimagined is an investment of $30 million and additional commissions into regional, rural and remote Australia uh to sustain those post offices, particularly those that we know are marginal to ensure that those services are maintained. As I said my opening statement, it's a different scenario in metropolitan areas where we've got significant overlap uh which has been built up over many many years. But in regional, rural and remote, uh it is about sustaining the existing services uh paying more commissions to those post offices that are on the margin uh and making sure that those services particularly where we are the only bank in town uh or the only provider of bill pay uh we know they're essential services those communities and they must be maintained.
>> Are you okay Minister?
>> Okay. I was just nodding because I I live in a regional town and the Trinity Beach LPO is a fantastic post office.
>> Okay. Well, Minister, the next question is for you. Christine Holgate at Team Global Express has a proposal to use rural and regional Australia Post outlets to provide last leg delivery services alongside Australia Post's own service. This will provide significant revenue for underutilized LPOS and provide options for the public. What is Australia Post's position on this proposal?
>> You'll have to ask Australia Post,
>> Senator. Happy to answer that. And I believe we've answered this question many times in Senate estimates. Uh TG is a private equity owned business. Uh they have the ability to invest in their own network. Indeed, on their website, they claim they've one of the largest networks in the country. Uh we already provide open access to our network. Last year we moved 90 million 90 million parcels on behalf of our competitors. uh we pay more than double the market rate to our licences for the provision of service for those parcels. Uh there is a low barrier to entry in relation to parcels. Uh what our competitors want to do uh is basically uh lower their own costs of operation. Uh and what they will then do is try and uh take our market share particularly in the metropolitan areas which are the high volume markets. Uh so we do not uh believe that opening up our network uh in the way that Miss Holgate has required is a smart or logical thing to do. It's not done anywhere else in the world uh because it's not a smart thing to do. Uh and we currently as I say have an open network where we already handle 90 million parcels of our on behalf of our competition.
>> Well, Miss Holgate was a pretty clever operator. She just in this for her
company. Well, the company's a private equity company uh senator uh who uh has only one goal and that is to ensure that they make money. Uh and we do not believe uh that that would be to the interest of Australia Post or the licences or communities. As I said in my opening statement, the growth in uh non-tropolitan areas is actually significantly above the growth we're seeing in the metropolitan areas, which shows that the cost of getting parcels and the service that we are providing is allowing those regional towns to gain access to an efficient parcel service, but also more importantly allowing those small businesses in those towns who want to sell uh their e-commerce products into the metropolitan cities to get those parcels delivered into those
for you if uh if her company started uh offering contracts to LPOS?
>> Uh well uh they would not be allowed to do that under the current arrangements that we have with those LPOS. As I say uh Miss Holgates website says they're the largest network in Australia. So I don't see why she would need to use
>> Just got one one topic to go. Four or five questions. Okay. What was the operating profit or loss on the letters business in 202526?
>> Uh we've covered that question uh uh with Senator Henderson uh and we've agreed uh to provide a breakdown further breakdown based on Senator Henderson's question. I'm happy to provide that to you Senator Roberts.
>> Thank you. And the same for trading and profit and loss for parcels please >> and bank post.
>> Uh yes again we can provide that uh those breakdowns. We'll take those on notice. Canada.
>> Thank you, Minister. I don't see anything in all these inquiries and estimate sessions which suggest this government is looking at bank at postal bank or rather a bank for the post office. A bank at post expansion to provide additional revenue to post offices. Do you have any intention of de developing bank post with additional
>> Um Senator, just your reference to inquiries, those aren't inquiries of the government. They're Senate inquiries.
of inquiries.
>> Can I just I need to get the language right. Um and so we obviously will consider recommendations from Senate inquiries. Um uh obviously Australia Post is very, you know, cherished, very important, and we're very committed to ensuring the financial stability of Australia Post, but operational decisions um are a matter for the CEO.
>> Well, as I said to the chair, this is about a bank. This is the topic. Um, your commitment to Australia Post will be seen through your what you do with it. But I want to know if you have any intention of developing bank at post
>> separate from Australia Post. Do you mean
>> bank at post using post post offices as banks?
>> I think you're asking me about what the operational decisions of the Australia Post.
>> No, no, I'm asking you. This is a topic we have been pushing for a long time as have others. Um, the State Bank of North Dakota, for example, is the only bank in North America that's made a profit every year of its existence, every year. >> The big bigger banks have fallen over. The Commonwealth Bank used to be the people's bank when it was formed by a Fisher Labor government in 1910, 1912. Um, it provided competition to the major banks. it became the biggest bank because it provided better services um and for the community for the for the it would be very beneficial for the community for the LPOS for all Australians and for freedom it's uh I've long been pushing it and it's it's successful in other countries Japan for example I think New Zealand are you doing anything to push an Australian bank
>> Mr. S I can respond to that. Uh the question is are we going to create or are we interested in creating a formal bank a full bank uh banking uh uh business uh at this point in time no we are not and I believe that's also uh the view of government as you say uh there are other postal operators around the world uh that have uh or are parts of large banks like uh Japan Post for example the largest bank in Japan uh that was from its origins uh many many years ago. uh the difference between providing over-the-counter basic service transactions that we provide today and becoming a full-ervice bank uh are monumental. Uh obviously the vast majority of our network is licences. Those licenses are not trained uh professional banking uh people. Uh there would be a significant need to upgrade the skills and upgrade uh the actual physical outlets because a lot of these outlets are very very small. uh but at this point in time there is no strategy for Australia Post to be anything other than providing an over-the-counter banking service as we do uh through Bank of Post.
>> Well, the history of the Commonwealth Bank, the first people's bank was that Dennis Miller was his first governor and he took the bank to be the the top bank in the country which kept the kept the private banks honest, gave them competition. So it's no surprise then that both Labor and Liberal governments since since 1923 and Dennis Miller's death have dismantled that Commonwealth Bank and then flogged it off as a private bank. Is this because in the last election cycle, Minister, the Labour Party took $4 million in donations from Australian banks who do not want Australia Post developing their banking service business. >> No, that's Dennis Miller. Mr. Graham started from scratch, had nothing and built it into the biggest bank in the country and the best bank in the country. For the record, the Liberal Party took $7 million from Australian banks. So that explains why they did nothing to widen bank of post. One Nation will will treat creating a people's bank as a matter of urgency and use Bank of Post offered those services around Australia. The bank has successfully worked for the benefit of the country.
>> What was your policy? Sorry. I What is it?
>> To establish a people's bank.
>> How much is that?
>> Just don't come with bank. >> Thank you, chair.
>> Thank you, Senator Roberts.
>> Thank you.
>> Thanks for your retirement.
>> Senator Henderson.