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Assuming society decides that some uneconomic postal routes are worthy of direct taxpayer subsidy, what is the cheapest and most transparent way to pay that subsidy? Taxpayers have a right to know exactly how much a guaranteed mail service is costing them, which of course is a function (amongst other things) of the distance the mail has to travel. Also taxpayers want assurances that they are paying the minimum amount necessary for such service;
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What level (such as number of days per week) of guaranteed mail delivery is appropriate in today's world? For instance, would society accept no price rise for letters in return for say, a 4 day per week delivery schedule?
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To what extent has Australia Post focussed on cost control, including lowering its staff numbers and trimming the pay of its workers? Here's an idea: has it considered shaving the obscene compensation of its chief, Ahmed Fahour who at $4.8 million is paid 130 times his United States Postal Service counterpart (when calculated by remuneration paid divided by population served)? For the record, Fahour in 2012-13 was paid nominally 9.4 times what Patrick R. Donahoe, the head of the United States Postal Service, an organisation breathtakingly bigger than Australia Post. USPS delivered 160 billion items of mail in 2012, employing 630,000 and serving 317 million Americans. To oversee that empire, Donahoe was paid a princely $512,000. And he gets a heck of a lot of grief from Congressmen for pulling in such a paycheque. Kind of slots us into the Bozo-the-Clown school of public remuneration, doesn't it?
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Has Australia Post looked at contracting out more services?
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Breaking Australia Post into smaller units?
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Considered hiring management consultants or senior executives from ivory towers other than Boston Consulting Group and the NAB from where Fahour and some other executives have earned their stripes?
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Will the Productivity Commission be asked to consider the costs and benefits of lifting in part or in full the regulations that prohibit letters from being delivered by anyone but Australia Post?
Let's say that most Australians conclude that letter delivery is a natural monopoly and needs the government to guarantee universal delivery, no matter where in this far-flung land someone lives. A fair question that could arise is whether those living in areas where the cost of delivery is high should be made to contribute more to the cost of that delivery.
Where Melbourne to Sydney mail say retails for $0.60 per letter, maybe mail from Melbourne to Broome should rise to $1.35 and mail within Melbourne should fall to $0.30?
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The comparison that should be drawn by critics of such a proposed change in prices (however moderate) is not to compare what they are paying now with what many would consider is fair for Australia Post to charge for such a service, but to compare what they are paying now to what a privatised Australia Post will fleece them.
The time has come for meaningful reform that will create a sustainable postal service.
Given our village like economy, where monopolies or oligopolies are the rule and not the exception, arguments for privatisation of Australia Post are little more than wish lists of special interests. And while they have little merit, I am sure they will be made.
There are many destinations that the Senate can arrive at when considering the future of Australia Post. But one is more attractive than most others.
Assuming a national resolve to keep universal letter delivery countrywide affordable - even if that means both small price falls on some routes and moderate price rises on other routes - an imperative must be to build Australia Post into a robust competitor in a range of marketplaces.
The recent sale by Wesfarmers of its insurance division to IAG only serves to underline this urgency as that sale merely further consolidated an already concentrated market. With zero public benefit.
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Why not allow Australia Post to partner with a global insurer to offer home, contents and motor vehicle policies? After all, it has the most important ingredients already: wide distribution points and a very recognisable brand. Or for that matter, partner with a foreign bank or with Apple Inc or Google Inc to offer financial products?
Such money-spinners will perform two necessary functions.
First, Australia Post's serious entry into the financial services space will upset the rent-seeking oligopolists currently carving the respective sub-markets for themselves, sheltered as they are from the harsh winds of competition. A large player like Australia Post will have a moderating influence on existing industry players' desire for price rises.
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