Where do we draw the line with Australia Post?


Australia Post is apparently going into mobile services and the resale of broadband. Why? And what are the implications?  I address this in part of Phil Dobbie’s ‘Twisted Wire’ podcast but my thoughts are also summarised below.

Australia Post has community service obligations that have resulted in a retail network around Australia. It has to provide standard letter services to rural and remote Australia and its network of postal centres and retail stores are a key part of delivering those services. It makes a loss on providing the community service obligations (CSOs), and has been competing with private businesses for years (for example, in parcel delivery), partly to create revenue to cover the cost of the CSOs.

But the latest foray into the competitive world of telecommunications raises two questions.

First, to what degree should a government-owned business, like Australia Post, be able to move into commercial areas that are (at best) peripherally related to its CSOs?

These moves by Australia Post are not risk less. Telecommunications is a harsh business littered with failures. If things go wrong and Australia Post loses money on its new ventures then it is the taxpayers who bear the risk. We are the shareholders who put up the cash, bear the risk, but have no direct say in what Australia Post does. So shouldn’t there be strict limits on the degree to which government-owned businesses like Australia Post can risk taxpayers’ money by moving into commercial ventures?

Second, the Australia Post model of meeting its CSOs is probably out of date. Rather than Australia Post going into NBN resale, should the government be rethinking how it provides basic letter services to the bush? Would a better way be to ‘eliminate the paper’ and provide an NBN based ‘mail’ service to remote Australia. After all, these residents will soon have internet through the NBN so do they also need taxpayer-subsidised snail mail?

So Australia Post’s internet venture signals two things. It is time to rethink how the govenrment provides ‘basic mail’ to remote Australia. And it is time to rethink the boundaries for what government-owned businesses can do with our money.

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