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Tuesday, 21 May 1985
Page: 2267


Senator PETER RAE(8.44) —I have now had the opportunity to read the letter dated 4 July 1984 written by Mr McQuitty of Australia Post to Mr Monaghan, the First Assistant Auditor-General, which relates to the efficiency audit of the provision of services to the public through post offices. Having read the letter, I am glad that I pursued the matter. I pursued the matter originally because part of the answer which Estimate Committee C received was in relation to a letter written by the Auditor-General in reply in this letter. In the documents which have been made publicly available in the written replies to questions received by Estimates Committee C is a letter written by the Auditor-General, Mr Brigden, to Mr McQuitty of Australia Post in response to Mr McQuitty's letter of 4 July 1984. This letter has been tabled, but is not otherwise public. It was tabled by the Minister for Community Services (Senator Grimes), who was in charge at the time. I now seek leave to have the letter incorporated in Hansard. It is three and a half pages of typing, but it does make some sense of the sequence of correspondence. I will make some comments and ask certain questions in relation to the content of that letter.

Leave granted.

The letter read as follows-

Australian Postal Commission Australia Post Chief General Manager 71 Rathdowne Street, Carlton, Vic. 3053 Postal Address: PO Box 302, Carlton South, Vic. 3053 4 July 1984 Telephone 669 7452 Area Code 03Reference

Mr C. T. MonaghanFirst Assistant Auditor-GeneralAustralian Audit OfficeBox 707 GPO,Canberra, ACT 2601

Dear Mr Monaghan

EFFICIENCY AUDIT OF THE PROVISION OF SERVICES TO THE PUBLIC THROUGH POST OFFICES

Thank you for the opportunity to examine the draft Audit Report which you enclosed with your letter to me of 16 May 1984.

I had hoped to get back to you sooner with comments but, with the mass of material that has been provided to your office over the past four and a half years since the Audit Feasibility Study commenced, obviously a good deal of work has been necessary to address the many observations, conclusions and recommendations made in the Draft Report.

You would be aware, of course, of responses by Australia Post to earlier briefing material from your Office in relation to the Audit, specifically our reply of 29 April 1982 which dealt with Audit proposals concerning Australia Post Agency Work and Post Office Automation and Work Simplification, and our reply of 21 September 1982, in relation to Audit's proposals for the Money Transfer Service. I understand that changes to that earlier material, as reflected in the latest Draft Report, have been relatively minor.

I also wish to correct any misunderstanding that may exist regarding the nature of briefing material provided to Australia Post for examination and comment. The position with the four Appendices referred to on page 2 of your letter, is as follows:

An incomplete briefing paper dealing with 'Development of the Counter Network' was received informally from your Office some twelve months ago. (At the request of your Mr Berthelsen this material was not commented on, and since then no further material has been received on this topic.)

The most recent material made available to Australia Post on ''Automation and Work Simplification in Official Post Offices'' was that enclosed with a letter from your Office dated 1 March 1982, to which we responded on 29 April 1982.

The Appendix dealing with the ''Public Telegram Service'' was attached to your letter of 16 May 1984 and is currently being examined.

We have not yet received or commented on any briefing material dealing with ''Work Measurement''.

There is obviously some confusion in your office on this matter.

Before commenting on the Draft Report, I feel it important that I trace a little of the history of the Efficiency Audit. First, as you may be aware, Australia Post went into the Audit in 1980, against the background of continuing basic change following the establishment of the Commission on 1 July 1975, including:

the management of changes resulting from the progressive withdrawal of work performed on behalf of Telecom Australia and the seeking of additional agency work;

fundamental changes in attitude and style, flowing from operating in a market environment and against a bottom line measurement;

progressive review of the mass of policies and practices inherited from the PMG Department; and

technological developments with potential application to significant areas of postal operations.

In other words, the enterprise was then, and still is, in a state of managed fundamental and rapid change.

As a matter of management philosophy we endeavour to take a helpful and open stance towards those who ask questions about us-the media, the unions and our customers are good examples. Certainly we do not pretend to have all the answers but our track record since Vesting of the Commission is evidence of our willingness to move positively and accept the need for change where it is in the best interests of the community at large and the enterprise. Our attitude towards the Efficiency Audit has been that of total co-operation, although after four and a half years of constant questioning and probing (in excess of 12 work years of effort to date) you will excuse me if I say that our enthusiasm is starting to fade.

It is against this background that the following comments on the draft report are offered:

In principle, as we have pointed out on previous occasions, many of the directions proposed in the Draft Report are supported. However, while the recommendations would appear to be technically feasible, the practicality of their realisation has, in many instances, either been overlooked or, at best, superficially treated. There was general agreement, I recall, that the means of realisation, in the face of staff organisation resistance to change, was to be a prime consideration of the Audit process. As the Audit Team would be well aware, Australia Post has a high public, industrial and political profile. Therefore, when change is proposed the implementation strategy and, more importantly, the effect on staff and the public must be addressed at the same time.

Secondly, there are numerous examples of what I have taken to be naivety on the part of the Audit Team. The nature of many of the recommendations suggests strongly that the Team started with the aim to introduce a 'paper-less office' concept, then rationalised all consequential implications around automation. A Report which does not identify and address the major issues related to change could be expected to be more of a millstone than a help to Australia Post in bringing about that change. For example, it is naive to suggest that Australia Post's services to major customers could just as easily be dispensed by non-official postmasters with additional training, that Australia Post's network of official post office buildings could be disposed of easily, that prior to 1983 Australia Post had not concerned itself with emerging trends in new technology, that staff organisations would readily accept the proposed changes to the Postal Levels Structure, that the introduction of new technology, if acceptable at all, would not be met by compensating claims for shared productivity increases. In other words the whole tenor of the report is far too simplistic in relation to the practical realities of carrying out a number of the initiatives that are specified in the report.

Finally, with the 4 years elapsed since the Efficiency Audit exercise commenced, most of the major directions in the Draft Report have either been addressed or work is proceeding currently, in particular-Corporate Identity, Postal Levels Structure, Electronic Funds Transfer, Electronic Mail, Financial Accountability Reporting, Divisional Organisation Restructure, Self-Service Postal Facilities, Automation of Counter and Related Clerical Activities, and the gaining of major new agency business for Australia Post. These major directions would have been pursued in any event.

These matters are obviously quite fundamental in terms of presentation of the formal Efficiency Audit Report and the stance that Australia Post would necessarily take in responding to that Report. The Draft Report also contains a number of misunderstandings, or otherwise incorrect statements, which would need to be attended to.

Having made these comments, I have some concern for the further resources that may be necessary from Australia Post in order to bring this matter to a speedy conclusion. No doubt you would echo my concern. I propose, therefore, that the ongoing liaison that has been such a time-consuming feature of this Audit since it commenced, be discontinued. In future, I believe that matters for resolution arising out of material provided to Australia Post should be handled on a formal basis. If this causes you any concern please let me know. In the meantime, Mr Williams has been made aware of this change.

I think there could be mutual advantage in discussion about the steps that need to be taken to bring the Audit to a conclusion, and should you be in Melbourne, and at a mutually suitable time, we would welcome this opportunity.

Yours sincerely

D. G. McQuitty


Senator PETER RAE —The letter states:

Thank you for the opportunity to examine the draft Audit Report which was enclosed with your letter to me of 16 May 1984.

I had hoped to get back to you sooner with comments but, with the mass of material that has been provided to your office over the past four and a half years since the Audit Feasibility Study commenced, obviously a good deal of work has been necessary to address the many observations, conclusions and recommendations made in the Draft Report.

What I asked by way of question has been confirmed; that is, whether it was correct that the audit examination had gone on for some four and a half years. That is what Mr McQuitty says in his letter. On page 2, he states:

Our attitude towards the Efficiency Audit has been that of total co-operation, although after four and a half years of constant questioning and probing (in excess of 12 work years of effort to date) you will excuse me if I say that our enthusiasm is starting to fade.

I ask: What does 12 work years of effort represent by way of cost? Page 4 of the letter states:

Having made these comments, I have some concern for the further resources that may be necessary from Australia Post in order to bring this matter to a speedy conclusion. No doubt you would echo my concern. I propose, therefore, that the ongoing liaison that has been such a time-consuming feature of this Audit since it commenced, be discontinued. In future, I believe that matters for resolution arising out of material provided to Australia Post should be handled on a formal basis. If this causes you any concern please let me know. In the meantime, Mr Williams has been made aware of this change.

I further ask: What does 12 years of effort represent in broad based money terms for Australia Post? Previously I had asked whether it was correct that the Auditor-General's effort represented some $500,000 worth of work. Senator Grimes answered that he was not in a position to answer for the Auditor-General, which I accept. In relation to Australia Post, I now ask what Mr McQuitty means when he talks about 12 work years of effort to date being involved.