Nine hundred jobs are going at Australia Post amid speculation letter delivery services could be reduced to three days a week by the end of the year.
The company says that letter volumes are facing drastic decline as a result of email and online communication. Last year its letters division lost $218 million.
CEO Ahmed Fahour claims that, “Without change and reform to letter services, we do not have the ability to absorb this loss”.
But the growth in online shopping has seen parcel deliveries soar. Currently, online shopping accounts for three quarters of parcel deliveries and 45 per cent of Australia Post’s total revenue, more than offsetting the losses on letters.
Talk of a financial crisis at Australia Post is massively overblown. Last year it made $312 million profit, up from $261 million in 2009, allowing it to pay the government a dividend of $244 million, as well as taxes of $447 million.
“This is not a company in crisis” Communication Workers Union Assistant National Secretary Martin O’Nea explains. “There were more than 4.5 billion letters delivered last year. That is around 87 million letters a week or 17 million letters a day”.
In 1989 the Hawke ALP Government corporatised Australia Post, forcing it to operate like a company. However it retains a Community Service Obligation, requiring it to provide letter services at a single Australia-wide price, deliver to 98 per cent of all addresses five days a week, and maintain 4000 post offices (2500 in rural and remote areas).
After a request from CEO Ahmed Fahour, the government is considering weakening these obligations.
But regular mail delivery is a public service which should be guaranteed by government—not made subject to profitability.
Loss of services will inevitably mean more job cuts. The recently announced loss of 900 jobs comes on top of losses last year and the transfer of 1000 people onto temporary contracts.
Despite this, Australia Post CEO Ahmed Fahour takes $4.75 million a year. This is almost twice as much as his UK equivalent, and eight times his US equivalent. It is 115 times the average postal delivery worker.
Any transition to online mail and services should be managed so that service quality does not decline. Instead of job losses, this could involve retraining, redeploying and expanding staff to assist the move to online services.
In May the government ruled out privatising Australia Post, but the Commission of Audit and the budget have laid the groundwork for future sell-offs.
So far the CWU has only weakly opposed the job cuts by demanding consultation. A serious union fightback will be necessary to stop job losses.
By Eliot Hoving