Australia Post no longer profitable, CEO Paul Graham says

Australia Post has revealed the grim future ahead for the organisation unless serious intervention is made to help it become profitable.

Chief executive Paul Graham provided the detail in an address to the American Chamber of Commerce in Australia (AmCham) in Melbourne on Thursday.

Mr Graham said Australians’ use of the postage service had plummeted consistently over the past several decades despite the online shopping sector boom.

“Ever since the global financial crisis our traditional business model has been eroding and the deterioration in our outlook is gathering pace,” Mr Graham said.

“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 5 per cent – and they have been falling ever since.”

Mr Graham said the digital shift had been “dramatic” for the organisation.

“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,” Mr Graham said.

“The reasons for this dramatic shift – email, apps and smartphones – have been well documented.

“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 3 per cent of all mail.

“As a result, we will post a financial loss this financial year with our letters business after posting a $189m loss for the first six months of this financial year alone.”

Mr Graham said most Australians were unaware of the challenges facing the national postage service.

“Our extensive research shows that just one in 10 Australians are aware that we are no longer profitable,” he said.

“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.”

Mr Graham said changes need to be made in legislation that impacted Australia’s postal services.

“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,” he said.

Mr Graham also took aim at other nationally significant Australian brands that he pointed out were no longer owned by taxpayers.

“Australia Post is one of the last of Australia’s great, publicly owned commercial endeavours,” he said.

“Qantas is no longer owned by Australian taxpayers, neither is Telstra. Australia Post is.”

Australia Post announced last week 400 jobs were set to be axed by the end of the financial year.

It comes after the organisation revealed in March that it was bracing for “significant losses” due to a decline in letter deliveries after the federal government released a discussion paper aimed at modernising the organisation.

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