Thank you Chair and Senators.
My name is Paul Graham, I am the Group Chief Executive O?cer and Managing Director of Australia Post, and I am joined by Nick Macdonald, our Group Corporate Secretary.
I would like to start by acknowledging the traditional custodians of the Canberra region, the Ngunawal and Ngamberi peoples and pay my respects to their elders past and present.
I thank the Committee for the opportunity to provide this opening statement.
In December last year, after an extensive community consultation process, the government announced a series of reforms to address the deteriorating outlook for our Letters business and continue the modernisation of Australia Post.
The reform roadmap announced by our shareholder ministers was a critical ?rst step in modernising Australia Post, establishing a platform for a more sustainable business that will continue to provide secure employment for tens of thousands of Posties and other team members.
The changes announced last year will also enable us to focus on what matters most to Australians – fast and reliable parcel delivery with better tracking technology and quicker turnaround times for eCommerce.
I’m pleased to advise the committee that we are already seeing green shoots from the modernisation reforms and our Post26 strategy, which is designed to simplify the business and deliver savings across the organisation, while continuing to invest in key services and improve customer outcomes.
Without doubt, both Post26 and the government’s modernisation reforms, will put us on a more sustainable ?nancial pathway.
However, we still face a challenging outlook as digital services drive down customer visits across the Post O?ce network and rising costs tip many Licensed and Corporate Post O?ces into ?nancial losses.
Late last year, we commenced a buyback for Licensed Post O?ces in metropolitan areas where we have saturation coverage such as Brunswick in Melbourne which has 76 Post O?ces in a 7.5km radius. The buyback o?ers select LPOs an opportunity to exit the industry before they are faced with unsustainable losses. These discussions are progressing well, and we expect this will go some way to address the broader sustainability of our Post O?ce network especially in metropolitan areas. But more still needs to be done.
There are more Post O?ces than supermarkets in Australia and we are required by regulation to maintain a national network of 4000 outlets. This is not sustainable, and more outlets will close as their ?nancial losses grow, speci?cally in metropolitan areas where we have a signi?cant oversupply of Post O?ces.
The minimum size of our Post O?ce network was set in 1989 before online shopping and the Internet boom. It makes no sense for Australia Post to continue operating such a vast network where there can be up to 83 Post O?ces within a single suburban area.
We will always ensure Australians have appropriate access to postal services and other important community services, but no retail business can sustain loss-making stores over the long-term.
We are progressively rolling out trials of our New Delivery Model, a key element of the reforms announced in December, and trials are being run across all states including in Camden Park in South Australia, Nepean and Hornsby in New South Wales, Butler in Western Australia, Brendale in Queensland, Alice Springs in Northern Territory and Launceston in Tasmania.
With the average household receiving about two letters a week, the New Delivery Model will free up more Posties to deliver parcels and support the booming eCommerce sector.
I would like to thank our union partners for working with us to bed down the New Delivery Model trials and for their support for the modernisation of Australia Post.
Over the past two months, Australia Post and the representatives from the Communications Workers Union have been working together to meet with frontline team members across Australia to outline how the New Delivery Model will operate and the importance of our Post26 strategy.
As I have said many times, our team members are the unsung heroes of Australia Post, and they proved that once again during the Christmas peak period – our busiest ever with almost 100 million parcels delivered and 15 million kilograms of airfreight moved.
The Australia Post team worked around the clock in the lead up to Christmas to ensure millions of Australians got their gifts and online sales bargains on time. On behalf of the board and executive team I would like to thank our frontline delivery and Post O?ce teams all for their e?orts.
In closing, I am pleased to report that Australia Post remains as relevant as ever to the lives of every Australian and with our modernisation journey well under way, we are in a stronger position to continue supporting the nation than we were 12 months ago.
Thank you Senators and I am happy to take your questions.
