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Thursday, 25 August 1994
Page: 361


Senator TIERNEY (1.17 p.m.) —The Australian Postal Corporation Amendment Bill 1994 is the government's response to the Industry Commission's Report on the efficiency of mail, courier and parcel service industries. The bill opens incoming and outgoing international mail to competition, it lowers the price and weight limits on Australia Post's reserve service protection, and it allows more flexible interconnection with Australia Post and the private sector.

  We support the small steps that this bill takes towards more open competition in postal services, but the real problem is that in many ways it is just window dressing. People should not be fooled into thinking that this great industrial dinosaur called Australia Post is at last open to the free-blowing winds of competition. The door has been opened slightly, there is a light breeze blowing through that door, but certainly it is not the full force of competition.

  We support some of the measures, but we feel that in response to the Industry Commission's report on postal services the government could have gone a lot further with other measures. It is surprising that the government has not done this. It claims it is in favour of micro-economic reform. Australia's postal services are completely under the control of the federal government. Yet in this area where the government does have complete control it is surprising to see that this bill—now it has finally been presented—is so timid in its approach to opening up postal services to competition. Given the information revolution that is about to descend on Australia, it is surprising that the government has done this. I want to refer to that in more detail later on.

  We heard the Prime Minister (Mr Keating) lecture the states on efficiency, on implementing the Hilmer report and on the need for open competition in a lot of the state authorities. In light of that speech, which was referred to by Senator Alston earlier, it is indeed surprising that the federal government has not gone further. What this bill is going to do is maintain the postal services restrictions, blocks and impediments to fair and open competition for private operators. It only gives lip-service to the Industry Commission. One would suspect the position of the postal unions is very prominent in the final outcomes of this bill.

  Some of the essential aspects of the mail service should be retained, such as the universal service and universal postal rate. We should allow more opportunities for private mail operators than is indicated in this bill. We should promote value added services and express bulk mail in the business market. There should be ongoing reforms of efficiency and privatisation of more postal services. We must keep up with the changing technology of the information age. We must free up the current restrictions that have been placed by the unions on postal services. These are some of the essential underlying principles that should drive this sort of legislation, but unfortunately we have only one small step here.

  The bill claims that there is no direct financial impact from this legislation. I find that surprising. Were one to even slightly open the door a little further to competition one would have thought that that would have some effect on Australia Post's revenue share. Dividends and tax receipts would be affected as certain reserve services are removed. As private operators win market share, that would obviously affect revenue going to Australia Post. It may be that this could be made up from micro-economic reforms and greater efficiencies, but one suspects that that will not happen because of union opposition to certain measures that might help Australia Post balance out the loss of revenue in other areas. The upshot of all of that is that the revenue will go down. So the government should not argue that this bill has no financial impact.

  I would like to focus on a number of specific aspects of the postal service that this bill will affect. It is claimed that the domestic letter market will have greater competition, but what is proposed in this bill is only a partial step. One could ask, `Where is the fair and open go for all competitors?' It is really only a timid measure. The letter service stays overwhelmingly under the control of the monopoly.

  The Industry Commission did suggest some very significant amendments, one being that competition should be open to carry letters of above 250 grams. There was another recommendation that the standard letter price rate gap remaining to Australia Post be reduced greatly. It now stands at five times the standard rate. That sort of gap fairly obviously is a huge restriction on competition. The Industry Commission recommended a much narrower gap, but the government has not moved in that direction.

  One of the more disappointing aspects is what happens with international mail. The carrying of international mail within Australia remains under the control of Australia Post and, although other people can carry mail to Australia, once it gets here it is Australia Post's exclusive right. This is an unfair restriction on competition and something that should certainly be opened up.

  There are some real concerns in the area of catalogues and leaflets where the bill favours Australia Post with particular advantage. If catalogues and leaflets are not enclosed in a transparent cover and addressed to persons or addresses, they will be reserved to Australia Post. So much for the competitive spirit that was supposed to be in this bill, as indicated in the second reading speech given by the Minister for Immigration and Ethnic Affairs (Senator Bolkus). Private sector operators who are publishing and distributing leaflets say that the amendments actually destroy the competition that now exists.

  One of the great needs in a more openly competitive market is in the area of document exchange. A fast, efficient, private document exchange and courier service is, unfortunately, very much restricted by this bill. Single item Australia Post charges are enforced and tend to ruin bulk mail competitive services and stop state governments using private couriers for interdepartmental mail. All of these restrictions are highly regrettable and very much at odds with the minister's rhetoric on competition.

  The bulk mail interconnection service in clause 14 is another major problem. Private operators are concerned about disappointing discount rates offered by Australia Post for the interconnect facility with their networks. There is some doubt that private operators would actually use it because they are so high. As we move into the new information age this sort of thing, where private operators are restricted from interconnecting, is a huge brake on competition and the development of industry. Australia Post and, particularly, the government should reconsider this measure. They could take a leaf out of the telecommunication groups in this country where we have some real competition between Optus and Telecom. We need more of that sort of spirit through the postal facilities as well.

  One of the aspects that Senator Alston referred to, which is a great worry, relates to the Australia Post board. The bill does remove some government controls; again, this seems to be a lot of window-dressing. It is true that there is no government appointment to the board. The managing director is appointed by the board, not the minister. But, of course, the bottom line is that the minister has the power to terminate any board member's or director's position. This, of course, gives the minister draconian control and is something that really should be removed. One of the basic services of a post office is the sale of stamps. There is no sale here other than the usual retail price. There is no discounting allowed and this, of course, hampers genuine competition. The stamp rate has been fixed at 45c and this is locked in to 1997. Again, no competition is allowed.

  In summary, the bill does have some welcome measures in that it does slightly open the door to competition. A lot more could be done. We really need, in the new information age, a vigorous and competitive postal service. This bill starts down the track, but the government does not go far enough. We invite the government, over the coming time, to reconsider its approach. In the areas that I have indicated, greater competition is needed to do this. Otherwise the industrial dinosaur that is Australia Post will be largely bypassed by what is going to happen in Australia with the development of the new information age.