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Government delivers better postal services.

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Media Release



Minister for Communications, the Information Economy and the Arts

Deputy Leader of the Government in the Senate


Government delivers better postal services


The Minister for Communications, Senator Richard Al ston, today announced that the standard letter rate will remain frozen at 45 cents until at least 2003, as part of the Government’s package to deliver better quality postal services to all Australians.


‘The package fully honours the Howard Government’s election commitment to retain Australia Post in full public ownership and provide the entire nation, including those in rural and regional Australia, with a standard letter service at a uniform rate,’ Senator Alston said.


‘No post office or mail centre in regional Australia will close as a result of our package. Australia Post will continue vital subsidies to 700 Licensed Post Offices in regional and rural Australia and maintain current concessional rate arrangements for the delivery of distance education material to isolated children.


‘Our commitment to high quality postal services for all Australians stands in stark contrast with Labor’s record of closing more than 270 post offices and agencies, and its recent campaign of lies about the Government’s plans for Australia Post.


‘Australians should remain very wary of Labor lies about Australia Post. Mr Beazley’s record in Government shows Labor always say one thing to get elected, and once there will do the opposite.’


The postal reform package was developed in response to the National Competition Council’s (NCC) review of the Australian Postal Corporation Act 1989.


Senator Alston said the package delivered a range of benefits to all sectors of the community by balancing the needs of industry with a commitment to service standards for all users of the postal network.


In keeping with this balanced and sensible approach, the Government did not accept the NCC’s key recommendation that all business mail be deregulated, which would have resulted in 93 per cent of Australia Post’s operations being opened to competition. Australia Post fully supports the Government’s sensible ‘post package’.


Under the package, the scope for competition in the postal market will be enhanced from 1 July 2000. The key features will be:


* Australia Post’s reserved service for Australian origin/destination mail will be reduced from 250 grams and four times the standard letter rate to 50 grams and one times the standard letter rate;

* all incoming international mail will open to competiti on from 1 July 2000 (with safeguards to prevent this being used to circumvent Australia Post’s domestic reserved service); and

* a review will be undertaken in 2002 to be completed by July 2003 to assess the effects of these changes and the need for further change.


‘This means that there will be open competition on price and service above 50 grams and the ability to compete with Australia Post on service, but not price, below this level,’ Senator Alston said.


Australia Post’s reserved service below 50 gra ms will enable it to continue to cross-subsidise the cost of providing Australians with the current nationwide letter service at a uniform price for standard letters up to 250 grams - the Universal Service Obligation. However, arrangements will be put in place to assure competitors that Australia Post is not cross-subsidising from the monopoly reserved services to the non-USO services it provides in competition with private operators.


The Government will also put in place arrangements that provide for access by competitors to Australia Post’s network on a similar basis and on terms and conditions no less favourable than Post’s offers its own customers. This access regime will encourage and promote competition while protecting the integrity of the USO network.


In addition to the benefits to consumers flowing from enhanced competition Australia Post will be introducing a range of measures to reduce costs and improve service to mailers:


* discounts for major mailers using barcodes;

* a reduction in the volume threshold (from 2500 to 300) for bulk mail discounts; and

* aggregation which will allow smaller mailers to have their letters combined into larger lodgements (minimum 10,000) eligible for bulk mail discounts.


The Government has also asked Post to develop a bulk mail monitoring system as soon as practicable in c onsultation with the Major Mail Users (MMU). Further, Post has agreed to meet with major mailers and the MMU to discuss concerns they raised in the course of the NCC Review with a view to developing a Code of Practice which will deal with these issues and facilitate Post’s commercial relationships with major mailers by the end of this year.


‘These initiatives are expected to allow small and medium sized businesses Australia wide to access a range of cheaper delivery options and improve the basis of Austral ia Post’s business relationships with major customers,’ Senator Alston said.


Senator Alston said the reforms followed the Government’s approval this week of a Service Charter which aims to promote and protect consumers’ rights. The Service Charter is underpinned by a set of performance regulations developed under the Act. The regulations require Australia Post to meet the following performance standards:


* 94% of letters to be delivered on time by ordinary post;

* 98% of delivery points to receive a minim um of five deliveries a week with the remaining 2% in remote areas receiving no less than one delivery a week;

* a minimum retail presence of 4000 postal outlets of which at least 2500 must be in rural or remote areas; and

* a minimum dispersion of street posting boxes (10,000).


The Minister thanked the NCC and participants in the review process for their contributions to the development of future postal policy. Necessary legislative changes will be introduced into Parliament later this year.


Media Contact:

Terry O’Connor, Minister’s office 02 6277 7480 or 0419 636 879




16 July 1998