Paul Graham, Group CEO & Managing Director of Australia Post
American Chamber of Commerce in Australia
Langham Hotel, Southbank
27 April 2023
Introduction
I want to acknowledge the Traditional Owners of the land on which we are gathered, the Wurundjeri people of the Kulin nation.
I want to pay my respects to their Elders, past, present and emerging.
And I want to thank the American Chamber of Commerce in Australia for inviting me to speak on what is an important day for Australia Post, because public consultation on the Australian Government’s discussion paper, Postal Services Modernisation, closes at midnight.
This consultation will help inform the future direction of Australia Post as an important public enterprise.
With that in mind, I want to take this opportunity to explain why the future direction of Australia Post matters to all Australians.
It’s appropriate that this discussion is hosted by an American institution.
Appropriate, because the history of Australia’s postal service reflects an early partnership with an American pioneer, Freeman Cobb.
You see, back in the 19th century – in the roaring days after the Gold Rush – one of the major carriers of mail in the Australian colonies was Cobb & Co – a business established by Freeman Cobb and a group of fellow Americans with an average age of just 22.
Their first route ran right through this part of the city, from Port Melbourne to Melbourne, back when Southbank was a camp for the argonauts who came in search of gold.
By the 1870s – Cobb & Co had six thousand horses running mail up and down the eastern seaboard, from Queensland to New South Wales and to Victoria.
By the 1890s – their bright-red coaches were even carting mail to the Western Australian goldfields in Kalgoorlie and Coolgardie.
The point I am driving at is this: the future of Australia Post, like its past, is not a story of converging technologies … or great distances … or changing economies.
Fundamentally, the story of Australia Post is a story about people.
The people who serve Australia Post – and the people Australia Post serves.
And it is those people and their interests – rather than the manifest destiny of digital disruption – I’m here to talk about …
.. because it’s my job to deliver a better tomorrow for them.
‘The Principle of Choice’
Don’t get me wrong. I’m not a luddite.
I believe in the transformational power of technology.
And, having worked in the global logistics industry, I’ve seen what can be achieved by wireless connectivity. Indeed, the movement of data today is even more important than the physical movement of freight.
But the real disruptors are not technologies like wireless networks or mobile devices or apps.
The real disruptors are people.
If you don’t believe me, look at how people responded to the pandemic.
Overnight, we changed the ways in which we lived and worked – and many of those changes, like working from home, have stuck.
Yes, technology enabled the working-from-home disruption, but technology was not the instigator of change.
It was the instrument of change.
That’s why technology is only as good as the people who design it, the people who use it, and the values that guide it.
It is up to us, in other words, to choose to respond to and embrace new technologies in ways that maximise the social, environmental, and economic benefits for our customers, communities and our country.
The principle of choice is important when – in the context of digital disruption – you consider the future of Australia Post …
.. because we are not slaves to the forces of digital disruption.
We have agency. We have choice.
And our choices should be guided by our shared values, which is why the modernisation consultations that close tonight are so important.
Regarding the public consultation, let me quickly brief you on the purpose of Australia Post.
‘We are at a Crossroad’
Australia Post is one of the last of Australia’s great, publicly owned commercial endeavours.
Qantas is no longer owned by Australian taxpayers. Neither is Telstra.
Australia Post is.
Our Post Offices – the more than four thousand of them – cover every corner of this great country.
Our workforce of more than sixty-five thousand direct and indirect team members reach out and – literally – touch every household in every city, suburb, and town.
We deliver the Census.
We deliver National Bowel Cancer Screening kits to people over 50.
We deliver countless services – with our Corporate and Licenced Post Offices and Postal Agents the last outpost in many communities for everything from banking and insurance to money transfers to applying for passports and tax-file numbers and a myriad of other essential services.
In addition, we are the backbone of the digital economy – especially Australia’s $67 billion online retail industry, delivering over 500 million parcels in FY22.
And we give back to the country through initiatives like the Indigenous Literacy Foundation and our community grants program, and our partnerships with Foodbank, Beyond Blue, DeadlyScience, the Australian Red Cross, and The Big Issue, and numerous other local and national programs that matter to us and matter to you.
Make no mistake, Australia Post is an essential community service – like water or gas or electricity.
That’s why nothing stops us. Not even the pandemic.
When much of the country was locked down due to COVID-19, we kept open and kept delivering.
But we are at a crossroad …
… because – ever since the Global Financial Crisis – our traditional business model has been eroding and the deterioration in our outlook is gathering pace. Until the year 2000, mail volumes tracked the economy – growing at around the same rate as Gross Domestic Product.
But, after Y2K, mail volumes began to flatline.
Then, during the GFC, mail volumes fell by five per cent – and they have been falling ever since.
In fact, since 2007-08 mail volumes have fallen by 66 per cent – and per-household mail volumes are expected to halve in the next five years.
The reasons for this dramatic shift – email, apps and smartphones – have been well documented.
But the bottom line is this: we are spending more and more money to deliver fewer and fewer letters. The average household today receives less than two letters per week and sends less than three per cent of all mail.
We are also seeing declining foot traffic across our Post Office network as digital services replace over the counter transactions and more and more people choose to use flexible options such as our parcel lockers.
As a result, we will post a financial loss this financial year with our letters business, after posting a $189 million dollar loss for the first 6 months of this financial year alone.
Our extensive research shows that just one in 10 Australians are aware that we are no longer profitable. It’s a stark message but the Australian community must understand that without change to their national postal service, its long-term viability is at risk.
The imperative for change is clear. We are governed by the 1989 Australian Postal Corporation Act – an instrument legislated before the internet boom and the creation of smart phones, when letters were the dominant form of communication, online shopping was yet to take hold and digital service-provision largely did not exist.
Performance standards issued under the Act are no longer fit for purpose to Australia Post as an enterprise or to the customers and communities we serve every day.
‘Get in Front of Change’
Our financial viability is important.
It is important because Australia Post is owned by the Australian taxpayer, but we are not financed by taxpayers, we are entirely self-funded.
We’re proud to be a self-funded public enterprise – and we want to remain that way.
We want to keep delivering essential public services to Australian communities and businesses – without taking a penny from consolidated revenue. That is funding that should go to schools and hospitals, not Australia Post.
We know that, globally, other postal services are facing similar structural headwinds.
There have been more than 11 reviews of Australia Post over the past 10 years and we do not need any more to repeat the same fundamental message: that the status quo is no longer an option for our business. The consultation process that closes tonight will help us develop the blueprint for change – but there is no question we must change.
What we need is the commitment and goodwill from the parliament to make the changes necessary to deliver a sustainable future. There may be a time later this year when parliamentarians are asked to consider changes to Australia Post to support the viability of the business. My simple request is to put the national interest first.
We want to keep Australia Post strong for all Australians and especially communities in rural and regional Australia, but this is only possible if we are financially sustainable.
We have seen what has played out with postal services overseas that were not supported to change and adapt, with some dramatically negative impacts on community and the public purse. We do not have to follow that path, but doing nothing is simply not acceptable.
That is why we are changing now – to get in front of the challenges facing us.
For instance,
We are a business that generates over $9 billion in revenue and in the past six months we have invested more than $200 million in new facilities, fleet, and technologies to improve our delivery and Post Office services, including the construction of the new Perth Parcel Facility named in the local language as Boorna Wangkiny Mia;
We also realised over $100 million in operational efficiencies in the first half of this financial year;
In January we increased our Basic Postage Rate from $1.10 to $1.20 – still one of the lowest prices for basic mail in the OECD;
We aim to have 100 per cent sustainable electricity usage by 2025 – and already have Australia’s largest fleet of electric delivery vehicles;
And, last year, we launched our Post26 strategy – our plan to both simplify and amplify our operations with three clear imperatives; looking after each other, delighting our customers and communities, and delivering a sustainable future both for the planet and financially.
Post26 is all about remaining financially, socially and environmentally sustainable.
In short, we want to simplify the way we work where we can – and amplify the way we work where we must.
The amplification of services is particularly important for communities and businesses that live and operate in regional and rural Australia.
That’s why we’re piloting a Community Hub in Orange – a larger Post Office footprint and new format to better serve customers in regional Australia. We are investing in the regions when others are leaving.
Coming back to the discussion paper on the modernisation of Australia Post, it’s important to note the principles that will guide our future directions.
Those principles are as follows.
Australia Post will remain in full public ownership.
Australia Post will remain financially sustainable.
Australia Post will continue to support the digital economy and the growing eCommerce market.
Post Offices will continue to serve communities – particularly in regional and rural areas.
And Australia Post will reduce the operating costs of the letters service.
In summary, our DNA is not changing, but we need to evolve to better meet our customers’ expectations in the modern economy.
We have been delivering for Australia and Australians for more than 200 years and we will continue to deliver.
But the ways in which we deliver our services has already changed – and must continue to change.
Conclusion
Let me finish by coming back to the purpose of Australia Post.
We are here to serve the interests of the Australian people.
That has always been – and will always be – our job.
And, speaking as a migrant, it is a job I am proud to do.
Australia has been very good to me and my family and millions of migrants over the decades – and it is a privilege to lead and serve one of Australia’s greatest public enterprises.
After all, the story of Australia Post is – in many ways – the story of modern Australia.
It is a story of migrants like Freeman Cobb.
It is the story of Aboriginal and Torres Strait Islanders like Mary Ellen Cuper – who became Australia’s first Aboriginal postmaster in 1874 in the town of New Norcia in Western Australia.
It is the story of convicts like Isaac Nichols – who arrived in Botany Bay in chains and became Australia’s first postmaster.
And it is the story of the sixty-five thousand Australia Post team members – including more than two thousand people with disability, representing over 134 nations, including one thousand nine hundred Aboriginal and Torres Strait Islanders – who strive to keep their fellow citizens connected to each other and the world beyond these shores every single day.
Having seen what those sixty-five thousand people are capable of over the past two years and reflecting on a proud history of over 200 years of service, I am excited about the future of Australia Post …
.. because I know with everyone’s support, we can deliver a better tomorrow.
