Last week Australia Post announced its annual results for the year to June 30. Key to it was a 66 percent plunge in profits, driven in part by a second year of decline in the volume of letters sent — down by more than 4 percent each year. The situation could get even worse if and when we see completion of the National Broadband Network.
To try and compensate for this disappearing revenue stream the government-owned entity is busy trying to find alternate ways of making money. For example, is their ex-banker chief executive Ahmed Fahour, going to try and offer a government-run bank?
Economist Stephen King (Dean of the Faculty of Business and Economics at Monash University in Melbourne) says this is precisely what they shouldn’t be doing. We need visibility of the costs associated with mail delivery, then determine as shareholders if there is a social benefit from them exploring other areas of revenue generation. One area that goes unquestioned is in the delivery of parcels, yet there are plenty of private parcel firms — do we really need a government owned body to compete in this space?