Australia Post reforms are in Turnbull's sights

Malcolm Turnbull’s determination to push ahead with his pre-election commitment to e-government will have the effect of fast-forwarding changes at Australia Post.

One of Communications Minister Malcolm Turnbull’s key reforms this year will be a direct contributor to fast-forwarding the need for decisions in another part of his portfolio, Australia Post.

Turnbull wants to speed up his pre-election commitment to e-government, a reform which will have the effect of fast-forwarding the revenues at Australia Post’s regular mail business.

That may explain why Australia Post’s Ahmed Fahour is keen for Turnbull to give him the flexibility he wants before he bangs the drum too much on the undoubtedly beneficial (to everyone but Post), e-government initiative.

Less government use of the mail service will radically slow one of the company’s only remaining key customers, with businesses being the other.

In contrast with much of this government, Turnbull has actually ticked boxes on many key reforms, including the new NBN framework and the ABC budget.

Australia Post is the obvious hangover, given Turnbull and Australia Post agree on the problems and the answers and the case for reform is clear.

Given the electoral cycle, Australia Post wants decisions sooner rather than later and Turnbull has said policy decisions are ‘imminent’.

The key reforms are more flexibility around stamp prices so they reflect costs and the end to mandated next-day delivery.

Government and business account for 90 per cent of Australia Post’s customer base.

According to a speech Turnbull made last year, the average household spends between $8 and $19 a year on regular mail services against $1,750 on phones, $404 on the internet and $670 on television.

Older Australians are less likely to support the concept of slower postal deliver but few want to pay the estimated $25 each a year it will cost to ease the pain at Australia Post for the rapid fall in postal volumes.

BCG has estimated that without some changes over the next 10 years Australia Post’s deficit on its mail business will total $12.1 billion, swamping the booming parcel revenue to push company-wide losses to $6.6bn.

There goes a reliable dividend payer for the federal government.

Of course, once Fahour gets the reforms he wants, the reality is he is merely slowing the decline because in our lifetime most see Australia Post being drastically changed by what Turnbull calls a ‘digital tsunami’.

His e-government policy is aimed at requiring all government services be available digitally by 2017, improving transparency by providing an online dashboard so taxpayers can assess policy process, a free, secure digital inbox to all government communication, online identity verification and increased use by the government of cloud services.

A revolution is planned which Australia Post can be part of, just in a different way that most of us see it now.

This article first appeared in The Australian and is reproduced with permission.