Who Really Owns Australia Post in 2024?

Australia Post delivers over 3 billion items each year. The iconic mail service is interwoven into the fabric of Australian life. But do you know exactly who owns and controls this vital service in 2024?

With mail volumes declining yet parcel deliveries booming, Australia Post stands at a critical juncture. This article gets to the bottom of who owns Australia Post, what obligations they have, and what challenges they face to remain viable into the future.

Australia Post: A Wholly Government-Owned Corporation

Australia Post was established in its current form in 1989, when the Australian Postal Commission was corporatized into the Australian Postal Corporation, adopting the more consumer-friendly name of Australia Post.

Prior to 1989, postal services were run by the Postmaster General’s Department from 1901 until 1975, and then the Australian Postal Commission from 1975-1989.

So while Australia Post has only been around since 1989, it is the successor to over a century of national postal services in Australia.

Importantly, Australia Post is wholly owned by the Australian Government. The Shareholder Ministers are the Minister for Finance and the Minister for Communications.

So unlike former government enterprises such as Qantas and Telstra, Australia Post remains in full public ownership today in 2024, on behalf of the Australian people.

And while Australia Post operates commercially, it does not receive direct government funding.

However, under its enabling legislation – the Australian Postal Corporation Act 1989 – Australia Post does have vital community service obligations:

“the letter service is reasonably accessible to all people in Australia on an equitable basis, at the same price.”

This obligation to universally serve all Australians has a major impact on the economics of Australia Post’s letters division, as will be explored later.

Key Obligations and Financials of Australia Post

As outlined above, Australia Post is established and governed by the Australian Postal Corporation Act 1989. This Act sets out Australia Post’s broad responsibilities.

The Act also establishes the Australia Post Board, which is appointed by the Government and comprises a Chairperson, Deputy Chairperson, Managing Director and up to six other directors.

The Board is empowered to set the overall direction of Australia Post and appoint the CEO/Managing Director. The Board and management team are ultimately responsible for Australia Post’s day-to-day operations.

Importantly, the Act also confers Australia Post the exclusive right to carry letters under 250 grams within Australia, with some exceptions. This legal monopoly over letter delivery is essential to supporting the universal postal service.

It’s also worth noting some key elements of Australia Post’s financial position:

• Revenue of $8.97 billion in FY22
• A small profit of $55.3 million recorded in FY22
• Forecasting the first full-year loss since 2015 for FY23

So while still profitable as of 2022, the economics of Australia Post are facing substantial headwinds which are explored in the next section.

Mail Volumes Decline While Parcels Boom

Since its peak in 2007-08, the number of letters delivered by Australia Post has declined by a massive 66%.

Australians are now sending 3.1 billion fewer letters every year compared to just 15 years ago. This rapid decline is outpacing Australia Post’s attempts to cut costs.

Driving this decline is the rise of instant digital communication through emails, messaging apps and social media.

For example, the average Australian household today receives just 2.2 addressed letters per week. By 2025 this figure is expected to drop below 1 letter per household per week.

At the same time, parcel deliveries are booming thanks to the online shopping revolution.

In 2021-22 alone, Australia Post delivered over 500 million parcels across the country. In December 2022, a record 52 million parcels were delivered, representing 25% year-on-year growth.

But the high costs of providing universal letter delivery across such a vast country are becoming increasingly burdensome according to Australia Post CEO Paul Graham:

“We are spending more and more money to deliver fewer and fewer letters. The average household today receives less than two letters per week and sends less than 3 per cent of all mail.”

So while parcels are providing much needed growth, the letters division is facing major structural challenges.

Australia Post Faces Challenges to Remain Viable

With personal communication methods changing rapidly alongside shopping habits, Australia Post must adapt its business model(organization) to remain viable over both the short and long term.

Australia Post CEO Paul Graham warns that without legislative reform, the business could require significant taxpayer support:

“At some stage in the next 10 years, there may be no mail to deliver.”

Graham notes precedents like the UK’s Royal Mail, which required over $2 billion in government assistance, as outcomes that Australia Post wants to avoid under their public ownership model.

Key reforms being advocated include:

• Greater pricing flexibility for business mail to subsidize universal delivery
• Cutting back letter delivery days from 5 days per week
• Allowing consolidation of metropolitan post offices
• Growing the commercial parcels business

According to Communications Minister Michelle Rowland, the days of Australians relying upon letter delivery may be numbered:

“Whenever the day comes, when the last letter is sent it will be delivered by Australia Post”

So while the postie on their motorbike remains an iconic symbol of Australian life, we may see less of them in future if mail continues its steep decline.

Yet messages still need to be sent, and parcels need to be delivered.

Under public ownership, Australia Post provides an essential community service that supports social connection and economic activity across Australia (australian).

As letter legacy technology is overtaken by instant digital communications, Australia Post will need to reshape its (organization) to fulfill its obligations sustainably.

But one thing remains certain – whoever sends the last letter across this wide brown land, you can bet it will still be delivered by Australia Post.

Conclusion: The Future of Australia Post

Despite facing digital disruption (2024) to its core letter delivery business, Australia Post looks likely to retain its public ownership and continue providing essential services to Australians for many years to come.

However, to sustainably meet its legislated obligations in the face of plummeting letter volumes, significant transformation is needed.

Through a mix of market-driven innovation in areas like parcel delivery, combined with government regulatory reform enabling operational changes, this beloved Australian institution can have a viable future.

The iconic postal delivery services everyday Australians rely upon will remain, even as the mix of letters and parcels shifts substantially.

And while the decline of letter writing marks an end of an era, the rise of eCommerce presents new opportunities to keep Australia Post and its posties delivering for the nation.

So next time you receive a parcel from your friendly postie, remember, Australia Post is owned by all Australians, serves all Australians, and will continue to deliver for all Australians into the future.