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Monday, 7 March 2005
Page: 134


Senator CONROY (9:30 PM) —Labor welcomes the opportunity to debate the Postal Industry Ombudsman Bill 2004 [2005]. Today the Senate finally has the chance to consider the government’s attempt to implement a reform that was initially promised by the coalition 3½ years ago in the run-up to the 2001 election. It is worth recalling the history of this initiative because it gives an insight into the priority of the Howard government and the priority that is given to improving postal services. On 21 October 2001, the then minister, former Senator Alston—


Senator Colbeck —A great man.


Senator CONROY —a great Collingwood supporter—announced with great fanfare that the coalition would:

Establish a dedicated postal industry ombudsman who will operate in similar fashion to the Telecommunications Industry Ombudsman in assisting customers who have not been able to resolve disputes satisfactorily with postal operators.

It is important to note that the government’s commitment was to introduce a postal industry ombudsman, or PIO, based on the model provided by the telecommunications ombudsman scheme—or TIO, as it is known. As I will detail, this is a commitment that has manifestly not been delivered. It was not until October 2002 that the government was moved to release a discussion paper on its proposal to establish a postal industry ombudsman.


The ACTING DEPUTY PRESIDENT (Senator Ferguson)—Order! Would senators please resume their seats or resume their conversations outside the chamber.


Senator CONROY —Hear, hear! Throw them out.


The ACTING DEPUTY PRESIDENT —I do not need your help, Senator Conroy.


Senator CONROY —It is those Western Australians; they are still over there. The paper indicated that the government was trying to get out of its promise to base the PIO on the successful telecommunications ombudsman model. It was when it released that paper in 2002 that you got the hint that it was actually running away from Senator Alston’s commitment. It floated a number of weaker options, including the option of industry self-regulation, as an alternative to the TIO approach. It was not until another year later, in October 2003, that the government finally announced its model for the PIO, which forms the basis of the legislation the Senate is considering today.

Senators may think that after all this time the government would have been able to develop legislation for the PIO which complies with its initial promise. Regrettably, that is not the case. Before I discuss the issue in more detail, let us be clear, Senator Abetz, as you moan over on the other side of the chamber: this is simply asking the government to keep its word—that is all. We are asking the government to keep its word, its promise, before it dishonours Senator Alston. This government is now dishonouring—in your words—a ‘great’ senator’s promise. Before I discussed this issue I wanted to make that point to Senator Abetz.

This bill inserts a new part into the Ombudsman Act 1976 which will establish the Postal Industry Ombudsman as a separate office within the Commonwealth Ombudsman’s office. The PIO will investigate complaints relating to the provision of postal services by Australia Post and other private postal operators who voluntarily choose to register with the scheme. For the purposes of this legislation, postal services are defined broadly to include courier services and parcel services. The ombudsman is not limited to act on the basis of complaints but can, on his or her own initiative, investigate Australia Post or a registered private postal operator in relation to the provision of postal or similar services. The ombudsman will have the capacity to investigate a wide range of complaints from consumers and small businesses.

The PIO will also provide a means for post office licensees, mail contractors and postal agents to resolve disputes with Australia Post. Sensibly, the ombudsman is not authorised to investigate complaints made by a postal operator against one of its competitors in the industry. The ombudsman is also unable to investigate complaints that relate to conduct which is more than 12 months old. The range of powers available to the PIO will be similar in scope to those of the Commonwealth Ombudsman. The PIO will be able to require the production of written information and require people to appear before the PIO to answer questions.

The PIO will not have some of the Commonwealth Ombudsman’s stronger powers, such as the power to enter premises or to override a person’s claims that documents are protected by legal professional privilege. The government’s view is that these stronger powers may act as a deterrent to private postal operators joining up to the scheme. Following an investigation, if the PIO believes that Australia Post or a registered private postal operator has breached the law or has been unreasonable, unjust, oppressive or otherwise acted wrongly, it may recommend that the postal operator take remedial action. This may include steps to mitigate or rectify the effects of the action or to alter policies or practices which caused the conduct under examination. In the event that the postal operator declines to take appropriate action following the PIO’s advice, the PIO may request the Minister for Communications, Information Technology and the Arts to table a report detailing its findings in parliament. The PIO will operate on a cost-recovery basis whereby Australia Post and registered private operators are charged for the cost of conducting investigations related to them. The details of the cost recovery mechanism will be prescribed in regulations. At this point, it is estimated that the operation of a PIO will cost around $300,000 per year.

I would like to make it very clear that Labor supports the establishment of the Postal Industry Ombudsman to provide users of postal services with a means to cheaply and efficiently deal with disputes that cannot be satisfactorily resolved by postal operators. The establishment of an ombudsman was a key Labor postal services policy at the last election. It is important, however, not only to have a postal ombudsman but also to establish an ombudsman with appropriate jurisdiction and powers to address consumer disputes. Labor believes that unfortunately the model that the government has chosen is the wrong one. Labor believes that the new postal ombudsman should closely follow the structure and powers that are associated with the TIO. As I noted at the outset, this is exactly what the government promised back in 2001. While I realise that 2001 was a couple of elections ago, it is still no excuse for the government to back out on its policies and commitments of 2001.

The TIO has been operating successfully since 1993 as a free and independent dispute scheme for people who have a complaint about their telephone or internet service. There are a number of significant differences between the TIO and the structure proposed for the Postal Industry Ombudsman. These differences have the potential to substantially undermine the effectiveness of the PIO in resolving complaints from users of postal services. Firstly, the TIO is a dedicated, stand-alone entity. The telecommunications ombudsman does not have responsibility for performing other regulatory roles for the Commonwealth. In contrast, the postal ombudsman will be an office within the Office of the Commonwealth Ombudsman. Under proposed section 19L, which will be inserted by this bill, the office of the postal ombudsman will be held by the same person who occupies the office of the Commonwealth Ombudsman. There are undoubtedly many dedicated and skilled staff in the Office of the Commonwealth Ombudsman. Nevertheless, the fact that the person filling the position of postal ombudsman will not have a dedicated focus on postal issues means that the role will not be given the full attention that it deserves. The government is effectively saying that the PIO is a part-time job. This will do little to bring the office to public attention or inspire public confidence.

Another major distinction between the telecommunications ombudsman and the postal ombudsman proposed by this bill is the extent to which the scheme covers participants in the industry. Under the Telecommunications (Consumer Protection and Service Standards) Act 1999, all carriers and carriage service providers are required to join the TIO scheme. In contrast, this bill states that the PlO will only have the capacity to deal with complaints against Australia Post and private postal operators who choose to join the scheme. It is not possible to imagine that a government would put forward a proposal for a telecommunications ombudsman that only required Telstra to join the scheme and said to other players like Optus and Vodafone that they could join the scheme if they wanted to. But that is just what the government is doing in postal services.

There is no question that Australia Post is still the dominant provider of postal services in this country. In order to fund its community service obligations, legislation gives Australia Post exclusive rights in relation to delivery of letters weighing less than 250 grams. Private operators are only allowed to carry letters if they charge at least four times the standard rate. Nevertheless, it is important to recognise that, outside those services reserved by legislation, Australia Post faces a substantial amount of competition in relation to other postal services. In addition, the relative importance of the reserved services as a share of services provided by Australia Post has been declining. In 2003-04 reserved services accounted for only 45 per cent of Australia Post’s revenue, down from 51 per cent six years earlier. In the last decade in particular, Australia Post has begun to face tough competition in parcel courier and express mail services. Companies like Toll Holdings, DHL, UPS, Allied Express, TNT and the Australian Document Exchange are significant players in these markets. While the bill gives the PIO jurisdiction to investigate complaints about postal or similar services such as couriers and parcel carrying services, the ombudsman will not be able to investigate complaints against these large and successful companies unless they voluntarily register for the scheme. Labor does not believe that this is a satisfactory outcome for consumers.

Given the growing size of private operators providing postal services, Labor believes that the ombudsman must have the capacity to have oversight of all the major players in the market. While it is to be hoped that many private operators would sign up to the scheme as a way of instilling consumer confidence in their service, the parliament should not leave this matter to chance. During the election campaign, Labor stated that it would act to ensure that the PIO scheme had coverage over all significant postal operators, not just Australia Post. In the committee stage of this bill, I will move amendments to broaden the scope of the PIO’s jurisdiction. These amendments will require all private postal operators who have more than 20 employees and an annual turnover in excess of $1 million to register for the scheme. This will ensure that more consumers are able to utilise the ombudsman scheme to resolve disputes with private postal operators. It may also have the effect of improving standards across the postal services industry as more operators will be subject to the scrutiny of the ombudsman. I hope that the Senate will support this strengthening of the powers of the PIO.

The final point of difference that I would like to highlight between the PIO and the TIO relates to the fact that the postal ombudsman will have no power to order postal operators to compensate consumers where they have engaged in wrongful conduct. The telecommunications ombudsman has the authority to make decisions, such as orders compensating consumers, up to the value of $10,000. These determinations are binding on all licensed telecommunications carriers. In contrast under this bill, where the PIO finds that a postal operator has engaged in wrongful conduct, the PIO may ask the postal service provider to take action to mitigate or rectify the effect of the conduct. If satisfactory action is not taken, the PIO’s only recourse is to request that the minister table a report on the company in parliament.

Adverse reports tabled in parliament would undoubtedly act as a deterrent to Australia Post and registered postal operators from acting wrongfully. Nevertheless, the bill does not provide much in the way of meaningful redress for individual consumers. Labor has given detailed consideration to the option of amending the bill to address this deficiency. On balance, however, the opposition has decided against this course of action. Labor recognises that empowering the PIO to make orders compensating consumers is a difficult drafting exercise, given the way the PIO is structured under this bill.

We are particularly mindful that care must be taken to ensure that the PIO is not given judicial powers in breach of the Constitution. While we will not be amending the bill to provide for compensation orders at this stage over the next few years, Labor will be closely monitoring the operation of the scheme. In government, Labor would review the adequacy of the Postal Industry Ombudsman’s powers and restructure the scheme to provide for compensation orders if necessary.

It is regrettable that in this area, as in many others, the government has not kept its election promises. More than three years ago, it said it would introduce a postal industry ombudsman that would be similar to the successful telecommunications ombudsman scheme. In reality, after a long and inexplicable delay, it has delivered a scheme that is inferior in several significant ways to the TIO model. Labor will seek to remedy one of its most glaring weaknesses when this bill enters the committee stage. I urge senators to support Labor’s proposal to ensure that the PIO has the capacity to investigate all significant postal operators.

Despite the deficiencies in the government’s approach, the proposed PIO is a step forward for consumers and will be supported by the opposition. There is a clear need for the establishment of an independent body to assist users of postal services to resolve disputes without the need to resort to costly litigation. I hope that the new Postal Industry Ombudsman will be able to successfully perform that role.