Aust Post Letter Fees to Increase to $1 and Take Two Days Longer to Deliver

benjamin on 05/03/2015 - 00:52
Last edited 05/03/2015 - 00:55

Have a look at the fact sheet for the changes, set to come into effect sometime after Sept 1st

http://auspost.com.au/media/documents/Reform-Fact-Sheet.pdf

Also, an interesting news article:

http://www.smh.com.au/federal-politics/political-news/abbott…

"Mr Fahour also defended his salary of $4.6 million a year - the highest paid public servant in Australia - saying 75 per cent of Australia Post's activity was commercial logistics and it was a "highly successful business". The latest annual report revealed 409 managers and executives at Australia Post were earning more than $195,000 a year"

General Discussion

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Comments

  • noyesmaybeok on 05/03/2015 - 01:41
    +15

    I'm not sure how slower delivery would save any money, would require the same amount of processing time etc.

    Unless it's not designed to save money, simply make money by getting people to pay extra for 'priority service', which is just the same speed as now.

    • modsec802 on 05/03/2015 - 07:38
      +1

      There's two changes: make more money off the slower service by charging $1.
      Make more money off people wanting the regular service by increasing it much more than $1.
      I don't think they could have just say doubled the current rate and left everything else the same without backlash or offering a slower cheaper service.

      • RockyRaccoon on 05/03/2015 - 07:45
        +4

        They also save money on Airfreight as items can be sent by road rather that by Air.

        How much that is I have no idea, but it has some impact

      • Thenarrator on 07/03/2015 - 17:17
        +1

        It could also save money by reducing staff/resources and prioritizing all remaining resources to deliver items on the priority list, in effect delaying 'normal' parcels who did not pay the extra $.

    • ProspectiveDarkness on 05/03/2015 - 10:16
      +2

      I'm not sure how slower delivery would save any money, would require the same amount of processing time etc.

      Not quite. In my area, now instead of processing all the mail at the local processing centre, it's sent to Dandenong and back. They already have trucks going back and forth, so now they just send that region's mail along with the rest.

    • Unbranded on 05/03/2015 - 11:35
      +42

      Slower delivery means Australia Post can process mail during the daytime and not pay penalty rates for workers on an overnight or weekend shift.

      • machej on 05/03/2015 - 22:35
        +1

        This is right on the money.

    • OzzyOzbourne on 06/03/2015 - 20:13
      +2

      Yes, where do they store all the stuff that taked days to arrive?! Surely having a constant x days of backlog costs money. I'm always amazed how parcels often arrive from overseas quicker than interstate! Or parcels which come from overseas in just a few days, then Auspost store them for 4 weeks before finally being delivered.

      You are right, they will introduce a premium service which you will pay even more for and senior management will award themselves even bigger pay packets with the proceeds.

    • onlyletters on 10/03/2015 - 14:41

      Instead of delivering your 1 letters a day, they will deliver your 5 letters once a week, that is how they save money.. It means 1 trip..

  • inherentchoice on 05/03/2015 - 02:45
    +8

    Snail mail is becoming obsolete. Now we will see businesses and governments abandon it even more.

    I feel sorry for the elderly who have resisted moving to online communication, but if they want to keep receiving their bills in their letter box then the increasing cost of the letters will surely be passed on to them as a fee by most companies. It already does cost $1 for a paper bill with a lot of companies, and then some also charge another $1 fee if you don't pay by direct debit.

    • inherentchoice on 05/03/2015 - 03:10
      +2

      I think the issue is more that it is becoming unsustainable to pay postal workers to deliver to every house in the country with current mail volumes and prices.

      Think about it… if a postie used to deliver 2000 letters a day, but now only delivers 200 letters a day, and that number is rapidly dropping, how is that sustainable? Is Bill Shorten going to fix that problem?

      If you read the SMH article you would see that it's forecast that Australia Post's letters business would lose $12 billion over the next decade if they let it continue.

      • RockyRaccoon on 05/03/2015 - 05:00
        +4

        But they want Abbott out, so no point trying to reason with them.

        Maybe they are training to be a Senator. And if they are neo Green, then Shorten isn't the solution :)

        BTW I want Abbott out as well, but blaming him for Aust Posts structural issues is Luddism

        http://en.wikipedia.org/wiki/Neo-Luddism

        @inherentchoice

        Pensioners outgoing postage costs will remain the same, but I agree incoming mail costs will be passed on via fees

        • [Deactivated] on 06/03/2015 - 18:24

          If you want to know why you should not vote for Liberals, it's this "we will not sell your assets".
          I kid you not, that was Labors one and only punchline for the entire QLD election and it worked. I'm a labour supporter btw, I just have no idea how they got in.

      • Blinkenlights on 05/03/2015 - 10:13
        +9

        tl;dr I disagree somewhat, the situation could be saved

        defended his salary of $4.6 million a year
        annual report revealed 409 managers and executives at Australia Post were earning more than $195,000 a year

        Adding those two together covers a substantial portion of the letter divisions losses.
        Ofcourse clever, savvy management are essential to Australia post - but they don't have them in my opinion. It seems they are abusing their position as a monopoly provider rather than using clever, savvy new products to lift their market share.

        Case in point: As a walk in to Australia post wanting to send a < 50 gram electronic item to the USA or other major OS destination, I would like a small envelope sized satchel costing under $10, perhaps with a 1mm foam liner as a little protection, that delivers nearly everywhere. (With tracking, sheesh that should be free, they do it anyway) Instead I am stuck with a paper envelope costing more than this, with an arbitary note on it that says "Documents only, width not to exceed 20mm". Wow, how completely out of date. Who would not email Documents? Where does the 20mm come from - is their equipment so archaic they cannot sort >20mm letters for $10?

        The Truth is they are substantially a monopoly and they have lost the plot at the higher levels. Pity the poor guys on the bikes (I mean the posties) who will suffer as a result.

      • Serapis on 08/03/2015 - 23:45

        They don't do this, what they're currently doing is tendering the work out to smaller companies and contractors at regular wages for deliveries… So they'll pay a set amount to you for delivery of say 10000 letters regardless of the time it takes you to do it.

        Current system is actually breaking down, they've been notified but they're ignoring this. Try apply for a tender and you'll see:

        http://auspost.com.au/about-us/mail-contractors.html

  • GnarlyKnuckles on 05/03/2015 - 10:10
    +3

    Isn't there some sort of "anti-competition law" banning anyone else from competing with Australia Post for the delivery of domestic letters? Given they've now decided to indulge in even more blatant price gouging, it's clearer than ever that competition is required/should at least be allowed; without competition, Australia Post has now become nothing short of a Government Owned extortion racket, which is only able to exist due to laws ensuring their monopoly.
    What we should lobby for, is competition.

    • sane on 05/03/2015 - 10:52
      +12

      They are fattening it up to sell it off.

      • The government gets a wodge of cash.
      • The auspost managers get a bonus/share giveaway (everyone's a millionaire).
      • The buyers get guaranteed rentseeking control on the letters market.
      • Everyone else gets screwed.
      • inherentchoice on 05/03/2015 - 11:29
        +2

        At least if they sell it then the new owners will make it more efficient. But they will probably first have to pay a lot of fat redundancy cheques to the deadwood "executives" who will stubbornly want to cling on to their +$195k that they could never get anywhere else.

        • iridiumstem on 05/03/2015 - 12:30
          +3

          Oh God, please don't tell me they are trying to privatise Australia Post.

          As much as I love free market and everything, Australia Post has a huge monopolistic power over the market and the market is probably structured so that the price elasticity of demand is fairly low (by the definition of monopolistic power, this has to be true). Privatisation would probably lead to worse pricing for consumers along with drastic increase in price for rural areas (though whether this will happen drastically or not would depend on stats which I don't have).

          Also, not all public companies are inefficient, POSCO started off as a public company, so did Singapore airline (as far as I remember the government still has the Golden Share).

        • inherentchoice on 05/03/2015 - 12:38

          @AznMitch:

          But their monopolistic power is reduced in the age of the Internet.

          Even Woolworths will deliver your eBay parcel now!

        • iridiumstem on 05/03/2015 - 12:43
          +2

          @inherentchoice: Yes, but not all mails can be delivered via email and those things have to delivered by mail. Since those things can only delivered by mails, it has no substitute. Also not everyone lives close to Woolies too.

          I don't know, there are certain things that I believe should never be privatised and I see mails as one of them. One of the things about public companies is that they don't have to concern themselves too much with profit.

          That being said, I don't believe that privatisation is always bad, but rather, not all privatisation is going to work.

        • RockyRaccoon on 05/03/2015 - 20:51

          @AznMitch: You compare us to Singapore. where they have lower tax rates for multinationals so they make sure the costs are paid by us and the profits end up in allow tax environment.

          And the singapore government owns and builds most homes

          Privatisation doesn't by default mean higher prices. If it leads to efficiencies it can make things lower in cost.

          The issue we face is that its a gamble, sometimes it will make things cheaper, other times it's going to do the opposite.

          Problem is that Aust Post does need to modernise as the internet is going to increasingly affect letters which can be sent by email. Parcels where they don't have a monopoly is the only growth area and that is already having to handle competition.

          Plus like in the Telstra situation it may take 10 - 15 years for the organisation to shift from the monopolistic public corporation mentality. But now look at Telstra it is thru innovation the best of all the Telco's inc the Singaporean owned Optus!!

        • iridiumstem on 05/03/2015 - 22:22
          +1

          @RockyRaccoon: I think I've said not all privatisation is gonig to work, welp that was my attempt at reducing the generalisation I've done (which obviously didn't work).

          I simply have different opinion from yours because I believe that private companies work only for their benefits and there are times when that really screws people over, i.e. TEPCO. Your arguments about Singapore government should backfire as by your means, Signaporian housing market should be worse off from being controlled by the government. Also, POSCO is Korean one.

          Also a lot of your arguments work on the basis of more competition as well, which makes your examples, i.e. telstra and parcel services, to be able to be explained by more competition.

          I personally believe that Government owned doesn't necessarily mean that they are inefficient to an extent where the only solution is privatisation. I simply see the cost of privatisation to offset many of the positive aspects that privatisation brings, therefore I personally dislike the idea of privatisation, especially on the necessities.

        • GnarlyKnuckles on 06/03/2015 - 13:57

          @inherentchoice:

          "Even Woolworths will deliver your eBay parcel now!"

          No they won't; that turned out to be a pipe-dream didn't it?

        • [Deactivated] on 06/03/2015 - 18:29

          @RockyRaccoon: I hope you're joking about Telstra. They are still very much a monopoly.

          Pretty much everyone agrees the telecommunications infrastructure should have been sold off in parcels now. When they sold it they didn't realise how important the internet would be.

      • arcticmonkey on 05/03/2015 - 22:38
        +2

        "Everyone else gets screwed".

        That's typical from privatisation.

        We'll see if NSW is as smart as the Queenslanders and chucks the big business Liberal party out.

        That's who the Liberals care about, not you or your health or your education.

        • GnarlyKnuckles on 06/03/2015 - 14:01
          -5

          "That's who the Liberals care about, not you or your health or your education."

          There's nothing more annoying than bleeding-heart pinkos jumping onto any random issue raised on OzB and using it as a platform from which to spout their mundane little anti-liberal scripts.

          How about you save it for around the camp-fire, in between the equally mundane verses of Kumbaya?

          Pathetic.

        • [Deactivated] on 06/03/2015 - 18:37
          +1

          We only got rid of the Liberals because of the Premier. He basically did a terrible job and thought being a bad-ass would make him look tough but fair. He just ended up looking like a bully keen to put someone else down to make himself look big. I think if they'd gone with a more reasonable approach with bikies/medical professionals contracts/pedophiles (i.e. the dude they decided to make a judge who shouldn't be) they'd be ok.

    • iridiumstem on 05/03/2015 - 12:35
      +1

      Just out of curiousity, is the competition legally prohibited in this market or is it just another naturalistic monopoly by the Australia Post? As in, is Australia Post the only company who is large enough to sustain its output with current pricing, and thus no other companies can enter due to this fact?

    • ugene41 on 08/03/2015 - 12:53
      +3

      Saying competition should be allowed is all well and good. But honestly which rational business is likely to enter the letter delivery business?

      Even with monopoly power Aus Post is making losses. I can see an argument where a business that has monopoly power is making a lot of profits and are then raising prices to increase their profits even more as an abuse of monopoly power. But this is completely not the case for Aus Post. Aus Post is being forced to keep their letter business because of regulation. If they had a choice, they would much rather just shut down this unprofitable business and focus on their much more lucrative parcel delivery service.

      More than just welcoming competition, I'm sure Aus Post would be more than happy to give their "monopoly" power in this market to any other business willing to take on the burden.

      • GnarlyKnuckles on 08/03/2015 - 13:17

        You are assuming that OzPost is making a loss on letters, despite operating efficiently. They do not operate efficiently.

        • ugene41 on 08/03/2015 - 13:52

          No I think you are automatically assuming that just because Aus Post is owned by the government that it is not efficient. Please provide some evidence of their inefficiencies. What can they do to improve their efficiency? Cost-cut? Fire senior executives? If you look at their annual reports, those are exactly the sort of measures they've been undertaking. The fact of the matter is none of those measures are going to grow your revenues. The letters business is a dying industry. There's no way around that. The smartest management consultants that "efficient" companies use to help them are also helping Aus Post and there's still no way around the fact a business in this sector will be loss making under the current pricing and service environment.

          Aus Post is actually quite a well run business for the Government. They've built a very successful growing parcel delivery business that pays for the essential delivery of letters throughout Australia whilst also providing the Government with a healthy dividend each year.

          You think the fact they have a "monopoly" in letters is an extortionist advantage they have in the sector. The fact is that being forced to keep servicing the dying letters business at a fixed low price set by the Government is a competitive disadvantage if anything.

          If you lobbied for competition in this sector, I'm sure Aus Post would be the first to support you.

        • Associatedl7unningMan @ Australia Post on 08/03/2015 - 14:36

          @ugene41:

          Mail businesses across the globe are doing poorly financially. Royal mail sold off on the cheap due to failures by the government and dishonesty by valuers has a slower service then AusPost priced at 55p or around $1Au per letter. They also have a population density significantly higher then Aus reducing the cost of the system.

        • ugene41 on 08/03/2015 - 15:30

          @l7unningMan:

          Agreed. It's just not an industry that anybody wants to be in at the moment. Competition isn't going to save it just as competition isn't doing anything to save the print media industry.

        • GnarlyKnuckles on 08/03/2015 - 16:39

          @ugene41:

          "No I think you are automatically assuming that just because Aus Post is owned by the government that it is not efficient."

          Actually I was basing my assumptions on some of the posts below; admittedly I am assuming they are based on researched facts. Posts such as the one by "inherentchoice" that includes this text:

          "409 executives earning over $195,000 each = $96,000,000"

          And this one by StPhen:

          "He now gets $4.8 million and $2 million in bonus each year. Ten times the salary of the USA postal service CEO."

          There is no way that those numbers are justifiable/'efficient'.

        • ugene41 on 08/03/2015 - 17:38

          @GnarlyKnuckles:

          A headline figure about how much the CEO and employees get paid tell you nothing about whether a business is efficient/profitable.

          Which business is more efficient and profitable? The local takeaway shop that pays it's employees $20/hr or the investment bank that pays it's CEO millions and recent graduates 100k minimum?

          Take AusPost's closest competitor in parcels delivery in Australia, Toll Holdings. Toll in total generated EBIT (earnings before interest and tax) of around $400m last year whilst AusPost's parcel delivery business generated $330m. Toll CEO, as the CEO of a non-government owned company, earnt slightly more than AusPost CEO last year. He'll earn even more this year through stock options since Toll have just received a $9bn takeover offer from Japan Post. Is that a business being inefficient paying it's CEO that amount?

          I'd argue that the AusPost CEO may even be relatively underpayed compared to his peers considering he not only has to manage a profitable parcel business the size of Toll but also a very large government regulated letters service.

        • GnarlyKnuckles on 08/03/2015 - 18:06

          @ugene41:
          But he/she has the help of "409 executives earning over $195,000 each". How many executives on that kind of salary does "Toll Holdings" employ?

        • ugene41 on 08/03/2015 - 19:01

          @GnarlyKnuckles:

          Again you're focusing on headline numbers with zero context and research.

          Toll doesn't disclose employee salaries because they're not public servants. If you really want to compare costs between the two companies and operational efficiency why don't we look at their EBITDA (earnings before interest tax depreciation and amortization) margins.

          Toll is at 8% vs AusPost at ~15% for their parcel business. That's almost double. So you tell me which business has been more efficient and have a better cost structure?

        • GnarlyKnuckles on 09/03/2015 - 00:17

          @ugene41:

          "… with zero context and research."

          No, I'm actively engaged in research, here on OzBargain. There seems to be quite a few people on here/even right here in this thread with some good knowledge in the area (that includes you, btw, and the actual Australia Post guy/gal who is kindly contributing, etc.); they've researched it, and are sharing their research, and I'm taking it in.

          Tell me this though. You seem to be loosely suggesting that the parcel-business side of OzPost is more profitable (as a percentage of outlay/costs?) than Toll. However, I'd like to know how OzPost allocates "costs" to either their letter-delivery business, or their parcel delivery business, re that calculation. Because in reality, it's a very blurry line/ there's a hell of a lot of over-lap between the two fields of OzPosts operations (letters and parcels). For example, take the ~$100,000,000 in salaries that it has emerged the tax-payers pay senior OzPost staff each year. What percentage of that is classified as an expense of the letter-delivery faction, and what percentage is classified as an expense of the parcel-delivery faction?

          You see, I'm thinking it would be really quite easy for a 'clever-clogs' highly paid exec (or large team of overpaid execs) to justify on paper that the lion's share of OzPost expenses were incurred-by/allocatable to the letters faction, while allocating relatively fewer expenses to the parcel-delivery faction. That way, they could then claim that they were doing an excellent job of running the parcel faction because it was turning a respectable profit, and could simply shrug their shoulders about the massive losses of the letter-delivery faction, absolving themselves of responsibility by claiming that it was a "white elephant", that no one could possibly turn a profit from. They wouldn't even have to worry about anyone 'calling their bluff'; because no one is legally allowed to compete with them for letter-delivery services!

          I'm sorry if I haven't explained this well enough for it to be understandable, I'm not very knowledgable in areas such as business/coorporations/EBITDA-type stuff etc.… But as a sort of simplified version of my question in case I've made an incomprehensible mess of the above, how could I ascertain what percentage of the CEO and senior execs' wages are classified as costs of the letter-delivery faction, and what percentage are classified as costs of the parcel-delivery faction?

          I'm betting you'll know the answer.

        • ugene41 on 09/03/2015 - 02:10

          @GnarlyKnuckles:

          "For example, take the ~$100,000,000 in salaries that it has emerged the tax-payers pay senior OzPost staff each year. What percentage of that is classified as an expense of the letter-delivery faction, and what percentage is classified as an expense of the parcel-delivery faction?"

          You're right in saying that it's often difficult to ascertain how companies apportion their costs between divisions and some "hiding" can happen. But I think in this case with AusPost, no matter how you cut the numbers, it tells the same story.

          Firstly, let's make it clear that taxpayers are not paying senior AusPost staff ~$100m in salaries each year. Taxpayers are paying nothing to support AusPost. Through its profitable parcel business, AusPost as an entity is generating enough money to offset the current losses in the letters division (not for long though if the current situation continues) AND generating a dividend to pay the Government. So if anything, it's AusPost supporting the taxpayer and not the other way round.

          Secondly, even if the whole $100m was to be apportioned to the parcels business and we increase costs in that business by $100m, it would still be operating at ~10% EBITDA margin and still on par/better than Toll. At the same time if we assume that the whole $100m in costs can be taken out of the letters business, the business would still be generating EBITDA losses of around $100m a year. So they'll still make a loss even if you're effectively assuming that the letters business fires anyone earning over $195k and can run itself without any senior managers or a CEO.

          I think no matter how you look at it, delivering letters is a dying service that less and less people need or use. Freeing this market up for competition isn't going to attract any better options. A monopoly in the letter delivering business means as much as a monopoly in the black and white tv business.

  • spychiatrist on 05/03/2015 - 10:27
    +13

    Trim that CEO's $4.5M annual salary first. What a joke!

    • whodidthat on 05/03/2015 - 11:42
      +3

      For sure.

      And stop giving his business family millions!

      • inherentchoice on 05/03/2015 - 12:59
        +2

        It's close to $100 million.

        409 executives earning over $195,000 each = $96,000,000

        And that is probably just their salary. Consider the cost for their business travel and conferences + a private office + a personal assistant + work computers and phones.

        • Baysew on 05/03/2015 - 13:31
          +19

          ..+ stamps.

        • toristo on 05/03/2015 - 22:13
          +1

          @Baysew:

          Err.. you didn't get the Exec Memo obviously… They just write their address on the front and the person they're sending it to on the back, then cross out their details and write "Return to sender" above it. BOOM! 70c saved.

          That was one of the first cost saving measures implemented.

        • Baysew on 05/03/2015 - 22:59

          @toristo: Must have got lost in the post ..er just got lost.

        • jenki on 06/03/2015 - 20:59

          I meant to vote a positive, I'm sorry I'll try to fix :)

        • altomic on 06/03/2015 - 23:17

          @Baysew: they don't use stamps because they consider the postal system to be too inefficient, slow, archaic and run by overpaid morons

    • Stphen on 06/03/2015 - 16:00
      +6

      He now gets $4.8 million and $2 million in bonus each year. Ten times the salary of the USA postal service CEO.

      • [Deactivated] on 06/03/2015 - 18:38
        +5

        I'm pretty sure the USA postal service CEO has a job a little bit more important than his.

      • Thaal Sinestro on 06/03/2015 - 22:16
        +4

        The CEO for UK's Royal mail only gets ~$1 Million dollars a year… One of the reasons why everything is so overpriced in Australia is because we have so many overpaid parasitic executives who just laze about in comfortable offices and go to meetings.

    • whoopdeedoo on 10/03/2015 - 14:09

      lets pay him peanuts. yay.

  • whodidthat on 05/03/2015 - 11:45
    +2

    I posted to Sydney on 20th Feb and it still hasn't arrived. Could have walked it there!!! (we're at the end of the freeway - M1)

    How much slower can it get???

    • alizzan on 06/03/2015 - 18:10
      +1

      Wait and find out?

    • Flying Ace on 06/03/2015 - 22:02
      +2

      That's nothing. I sent two postcards from here in Vietnam last September to Australia, and they only arrived in January!! Four months :D

  • retiredfeline on 05/03/2015 - 12:16

    OP forgot to mention that 97% of letters sent are commercial. It's not as if grannies all over Australia can't figure out how to use a phone or email. Speaking for myself, the impact will be minimal. I think I send perhaps 2 letters a year, when other means, including Internet and fax, are unavailable. Even bills and statements are practically all electronic now and all of the providers and utilities are pushing for Internet delivery, or Internet notification with self-service.

    Yes, it will cost businesses more and they will pass it on to consumers. But they will do the same for other rises in costs, such as fuel, labour, materials, etc. The alternative is taxpayers subsidising a postal system.

    • GnarlyKnuckles on 05/03/2015 - 16:52
      +2

      "The alternative is taxpayers subsidising a postal system."

      That is not 'the alternative', that is the current reality. If competition were allowed, this would be exposed almost immediately. OzPost would be forced to cut all the dead wood and compete, or simply disappear making way for an efficiently run, competitive market.

      That is what needs to happen.

      Tangible assets like state forests etc. should not be privatised, because private companies cannot be relied upon to respect their inherent value/put that above pure profit-making. Conversely though, the provision of services should be privatised; because it has been shown time and time again that wherever the government is 'entrusted' to run a service, of any kind, they run it very inefficiently. If they have a protected monopoly on the service, that makes it infinitely worse. In such cases, they simply have no incentive to make anything more efficient, ever. And they don't.

      • retiredfeline on 05/03/2015 - 17:38
        +2

        Why get all worked up? Letters are dying and this will be another nail in its coffin. The other sectors are already contestable. Meh.

        • GnarlyKnuckles on 05/03/2015 - 23:02

          I am not so much 'worked up', as I am baffled as to how this (Australia Post's monopoly/ crap letter-delivery service/ price gouging) has continued to get worse and worse, without it being stopped. Your apparent stance that others should not worry about it because it hardly affects you personally at all, is perhaps a little… 'simplistic' (among other adjectives that spring to mind).

        • retiredfeline on 05/03/2015 - 23:37

          @GnarlyKnuckles: It'll be hardly a blip in the cost of living for most people. Feel free to champion the remainder. I think there other issues to get more worked up over. Data retention for example will be privacy invading and ISPs will pass the cost to customers.

        • GnarlyKnuckles on 05/03/2015 - 23:45

          @greenpossum:
          I do agree with that on a 'personal'/simplistic level Gposs; i.e. 95% of peeps probably pay to send less than 20 letters a year, themselves. But consider that the costs any consumer-based business incurs to send letters, including B2B etc., will ultimately be passed on to their consumers (or the tax-payers, if the law/system is structured to allow that). Thus, even if you send/recieve no letters directly yourself, if the cost of doing so suddenly more than doubles, you will pay for that… via the 'costs of doing business' being passed on to you, as a consumer.

        • retiredfeline on 05/03/2015 - 23:47

          @GnarlyKnuckles: As I said I do not believe the effect on the cost of living will be noticeable compared to other business expenses. You may differ. Let's leave it at that.

        • GnarlyKnuckles on 05/03/2015 - 23:54

          @greenpossum:
          Perhaps you are right. Such a wild jump in price could actually cause a dramatic shift away from all non-essential snail-mail by almost all businesses (as a 'group action/protest'-type thing), which may actually function to save the consumer money in the long run. Hmmmm.
          I'm thankful for your responses in this thread… that probably wouldn't have dawned on me as a possibility unless you'd persisted with your point!

      • Thaal Sinestro on 06/03/2015 - 22:24
        -3

        "the provision of services should be privatised; because it has been shown time and time again that wherever the government is 'entrusted' to run a service".

        You are so wrong. You talk about how efficient your beloved private enterprise is, but whenever anything has been privatized, ordinary people end up paying more for less. Privatization is a license for rich corporations and sociopathic shareholder scum to steal from the common man. Whatever private enterprise can do, the state can be better and at a lower price. The only thing private enterprise is efficient at, is at forumlating ways to fleece people.

        The world would be so much better if we abolished private enterprise and had the state run everything.

        • GnarlyKnuckles on 07/03/2015 - 00:48
          +1

          "Whatever private enterprise can do, the state can be better and at a lower price."

          Surely you jest? Does the word 'Telecom' mean anything to you, or are you a bit young for that?

          "The world would be so much better if we abolished private enterprise and had the state run everything."

          Okay now I'm pretty sure you're joking/trolling whatever you want to call it. Just in case you're not, consider 'the lot' of citizens in current-day North Korea, pre-reform Cuba, pre-unification East Germany, pre-capitalist reform China, any territory under dictatorship rule (think yester-year Iraq, Libya, etc…)

          These are/were places where "the state runs everything", and as most would realise based on the enlightenment history has provided us with, life is/was very sh#t in those places. It has been proven countless times in societies/countries the world over, that whenever there is no competition (i.e. 'the state runs everything'), that services steadily deteriorate; to the point that they become farcical.

        • iridiumstem on 08/03/2015 - 23:57

          @GnarlyKnuckles: Ummmm, you are pretty much ignoring South Korea and Singapore there. If it weren't for government driven development, Samsung would've been just small electronics store and so would be LG. POSCO, which is 4th largest steelmaking company by production volume, wouldn't even exist if it weren't for the Korean government and its central planning, banks have denied funding it so government funded it mostly.

          By neo-classicalists' arguments, from 50s, South Korea should've produced wigs and focused on those labour intensive industries because those were the only areas where South Korea could excel in. I personally think that if it weren't for the government driven, planned development, South Korea wouldn't be standing where it is. Just to give you an idea, until 60s~70s, South Korea did worse than North Korea.

          Toyota was subsidised to an extent which is unthinkable, well at least by the neo-classicalists perspective (I think that it happens more often than it is credited for), by today's standard. If it weren't for the government subsidies, Toyota would still be a mill maker.

          I don't deny that dictatorship is bad in many many respect, but is it as bad as how western world portrays it to be? That, I have to put a question mark. Please don't bring, the current situation with dictators, I don't deny that dictatorship can easily bring corruption. I don't deny the hardship that people would be going through under those dictators either. I am not trying to glorify dictatorship. I simply am pointing out that statements like "dictatorship is just evil and never does the country any good" or "central planning never works", without looking at the counter examples is not smart. I personally think there is something more to them.

          I know that this idea of dictatorship/central planning being anything decent is something hard to think about, but there are examples where it have worked. Just putting it under the carpet, naming it an "outlier", or try to come up with explanations that circle around this is just like how we've tried to put the Earth in the center of universe, in my opinion.

          TL;DR: Talking in absolute is bad. There are counter examples on argument "central planning and dictatorship ruins economy", where central planning and dictatorship have resulted in positive results. Though, I am not denying the current situation with dictatorship in many countries nor trying to glorify dictatorship.

        • GnarlyKnuckles on 09/03/2015 - 00:42

          @AznMitch:

          I simply am pointing out that statements like "dictatorship is just evil and never does the country any good" or "central planning never works", without looking at the counter examples is not smart.

          You seem to be implying that I actually said those things… I didn't… did anyone in this thread say those things?!?

          Anyways, I agree Singapore is indeed a remarkable place in the sense that you are emphasising. It's pretty much the only country in the world ruled fairly rigidly by 'the state' that is (I'm told) a decent place to live. They're world-leaders in public perceptions of being non-corrupt, and various objective measures suggest that it is not just perception; they actually are a very 'uncorrupt' government/state-run entity/whatever you want to call it. I reckon to at least some extent though, this is due to their relatively tiny population. It's less than a quarter of the size of Australia's population, to put it into perspective.

          South Korea is not such a simple/easily analysed story, re various things including quality of life, corruption, etc. I do take your point about their relative prosperity though, and the enduring success of their economy, despite it being (sort of) state-run. I say "sort of" because some would argue that large conglomerates "wag the dog" there and have done for decades… but I haven't done enough research/don't know enough about that to have a very informed opinion on it. I will try and learn a bit more about it though; you've sparked my interest!

        • iridiumstem on 09/03/2015 - 00:58

          @GnarlyKnuckles:

          These are/were places where "the state runs everything", and as most would realise based on the enlightenment history has provided us with, life is/was very sh#t in those places.

          I've got the gist that you were implying these:
          "dictatorship is just evil" and never does the country any good" or "central planning never works"

          I simply found those words to sound weird to me, because as you would've seen from my last blob of writing, I personally think the some parts of the development of Korean economy is due to state running things. My dad never have gotten on a bus until he turned 13. He used to walk 1 hour to the nearest primary school. After one generation, you see me, who've ended up going on a plane to Australia to study at age of 13.

          If you were not implying those, then I apologise. Anyways, I personally think the whole concept of central planning is just frown upon because of the cultural influences. American Economists are fairly strong with their neo-classicalist approach and speaking against democracy something that still is, even to this day, almost a taboo (for a good reason too); I personally find the idea of central planning is a taboo in many places and it is not even studied. I am not trying to glorify anything, I am simply pointing out that it deserves researches on it and it shouldn't be just discarded as bad because of the cultural background we are from.

          I personally think that there are positive aspects of central planning that is ignored in Western academia (which unfortunately influences what is taught in Asia as well). I wouldn't argue that Korea have benefitted 100% from central planned economy without any side effects, since it was a double edged sword. President Park pretty much focused on growth and growth only and I think South Korea is seeing side effects of it now. That being said, I personally think the some parts of the growth can be credited to central planning. If there weren't any government driven funding and planning, we would've focused on labour intensive industries like wig making industry and stayed there. If we go into Chaebul (Conglomerate), I'd have to argue that it was due to the strong government that they were able to do whatever they wanted to do and many of them had strong ties to the government as well. The first president of POSCO was an ex-military personnel.

          I personally think the idea of unrestrained free market to be flawed. Other than the ethical concerns with child labour, labour extortion and other ethically questionable acts (which by the definition of unrestrained free market, should be allowed), I personally find the idea of homo economicus to be suitable for models and not really suitable for policy decisions. Also, as there are restraints in the market, it becomes more complex in my opinion, to just say market will solve every single problem by itself. Though as you can see with the repetition of the word, personally, it's just where I stand at the moment with regards to what you've wrote and what I've wrote.

          I am going to finish my "argument" (I don't think I have enough infos/statistical analysis to call this blob of writing as an argument) here. It's time consuming. Though, if you are interested in looking at economics from different perspective per se, i.e. non-mainstream, non-neoclassicalist's approach, I suggest reading some of Ha-Joon Chang's books. I am sure there are many other great economists, but the examples I've came up with is pretty much from his books (rather my limited memories of what he've wrote, probably didn't even go into the depth required to talk about his research but still). I think you can get the Bad Samaritans from Google easily. I think the book's a good read at least, if you are interested in Economics.

  • noyesmaybeok on 05/03/2015 - 12:20

    I'm curious how they divide parcels vs letters. Letters make such huge losses, yet a $5 parcel which is the same size as $20 of letters somehow makes a profit?

    Not saying it's skewed I'm just curious as to how they divide letters and parcels costings given processing centres, trucks etc would all be doing both.

    • retiredfeline on 05/03/2015 - 12:21

      Parcels don't have to be delivered as quickly.

      • noyesmaybeok on 05/03/2015 - 12:25
        +1

        I haven't timed it, I seem to get letters and parcels around the same 3-4 day mark.

        I was thinking about it last night (I have the best dreams… not), given the volume of mail they manage I'm not sure how they could be so confident letters cost a ton yet parcels don't, how exactly are they dividing the expenses given there is a ton of overlap.

        • retiredfeline on 05/03/2015 - 12:28
          +1

          The processing paths and personnel involved can be separated to a great extent. More to the point, letter volumes and revenues are going down, and parcel volumes are going up.

        • GnarlyKnuckles on 05/03/2015 - 16:57

          @greenpossum:

          '…letter volumes and revenues are going down, and parcel volumes are going up.'

          That may be so, but surely there'd still be at least 10 times more letters sent, than parcels. Think of the average house-hold. Might get an average of about 1 letter a day (some days 2, some days none, etc.). Compare that to the amount of parcels they receive per day, on average. The same probably holds trues for most businesses. This is not including parcels delivered by couriers (we are talking about OzPost here, not the private domestic delivery of parcels).

        • retiredfeline on 05/03/2015 - 17:17

          @GnarlyKnuckles: Well I'm probably not typical then despite having several bank accounts, the usual utilities, council, etc. Of those only the council still sends rates invoices and I've been trying to get them to go electronic. I might get perhaps one letter per week. Often a charity appeal. I used to worry about important mail or mailbox overflow while on holiday. Now there is so little that I don't have to pay for mail holding.

          Remember that B2B accounts for a lot of parcel volume.

          Auspost has given their volume figures. If you want to dispute those, be their guest.

    • MetalPhreak on 05/03/2015 - 22:29
      +5

      $20 of letters need to be delivered to 20 addresses.

      A $5 parcel only needs to go to one place.

    • rapoot6 on 05/03/2015 - 23:15
      +3

      Also, no parcel costs $5 in australia. That is only if you send them from overseas(dont ask me why)..

  • dlakers3peat on 05/03/2015 - 20:04
    +7

    Australia post is like the mafia. If anyone thinks of trying to take them on they will make sure they are taken out. They provide rubbish customer service while charging premium prices for a lack lustre service. If there was any competition to Australia post they woukd have been bankrupt long time ago. Its easy to be successful when you have a monopoly on an essential service. I depise australia post but like everyone else I have to use them.

    • GnarlyKnuckles on 06/03/2015 - 00:11

      Unlike the mafia, I think that Australia Post is actually protected by law against any competition, re the delivery of letters (not parcels) within Australia. That is, I think I have read that it is actually illegal for anyone else to set up a business offering this service, within Australia. If that is true, they have a legally sanctioned monopoly. Unfortunately I can't remember where I read this, but I seem to recall the justification of it had to do with stamps essentially being legally classified as a form of 'quasi-currency'.

      Can someone knowledgable in this area clarify whether or not Australia-Post actually does have a legally sanctioned monopoly on the 'letter delivery' business? If they do, is it the only direct-to-consumer service-providing business in Australia that enjoys such a legally sanctioned monopoly? I mean, I can understand why a few select businesses need to have a legally sanctioned monopoly (such as those that print money, for example); but Australia Post is not one of them.

      • iridiumstem on 06/03/2015 - 11:53

        It might be simply from the time when all documents, legal and official etc, were transported by mails, which still happens. Therefore there needed to be a control on who delivers them for the sake of safety and privacy.

        Though this is basically a speculation, in other words, might be just worthless babble. Monopoly with reasons like that is not uncommon.

      • jnewau on 06/03/2015 - 12:24
        +1

        Yes, they are protected under the Australian Postal Corporation Act for letters up to 250g. And yes, they are the only entity allowed to issue stamps.

        The reason why they are protected (and why I believe they should continue to be so) is because like Telstra, they have Universal Service Obligations to deliver letters to ALL Australians, not just those deemed profitable by a corporation.

        Championing the free market like you're doing is all well and good, but it is obvious that in a nation as physically large as Australia that private competitors will simply cherry pick the large city markets and everyone else in the country can get stuffed.

        Not even the champions of Free Enterprise, the US has privatized their mail system because they too recognize this. It might be working in the UK with the Royal Mail privatized but don't have a fraction of the landmass (and associated costs) that AP has to cover.

        • RockyRaccoon on 06/03/2015 - 13:31
          +1

          Universal service obligations and privatisation are two separate points, don't confuse them.

          Telstra now privatised has USO to meet. These can be legislated for.

          The difference between Telstra and Australia post, is that Telstra owned the delivery mechanism. The Wires. While this is still true, it does face the issue with Wireless where it competes with other spectrum owners.

          Aust Post only owns the postie bikes not the roads so apart from the Office locations and sorting centres they don't have a monopoly infrastructure all they have is a monopoly via legislation.

          If they keep losing money then it comes from the Government which means less other social services that can be delivered. Even the government uses electronic distribution for many of it's payments and communications. Sure it can raise taxes, but that's the same as raising the price of the letters, and again why waste the money which could be used for other things.

          Now if Aust Post had something unique it could offer and something that could generate economic rent from, arguments to keep it in govt hands makes more sense.

          BTW the US is considering the privatisation of US mail, like us here they are discussing this and will continue to do so. The longer that it loses money ($A1Billion last quarter alone), the greater the likelyhood that they may follow the UK lead.

    • Associatedl7unningMan @ Australia Post on 08/03/2015 - 12:44

      The monopoly doesn't really matter anymore, the only service AusPost has a monopoly over is the letter service which is over 100 years old and since email the volume of letters sent across the globe have been decresing. Its an unprofitable, declining business that no one with money will want any part of.

      If you have a successful business model for a letters service in 2015 and beyond then patent it. You would make a lot cash selling it to every government in the world.

  • rapoot6 on 05/03/2015 - 21:44
    +4

    Let's hope they don't raise parcel prices again to cut the losses from their letter service.

    • Turd on 06/03/2015 - 10:56
      +1

      They will rise parcel prices, it's a given.

    • Associatedl7unningMan @ Australia Post on 08/03/2015 - 12:19
      +1

      They just did on 2/3/15

  • easternculture on 06/03/2015 - 00:03
    +1

    They scammed me with an iPhone which was lost in the parcel center . It was never scanned out.

    • JimmyF on 06/03/2015 - 21:47
      -2

      if you had insurance on it, then no problem at all!

      tracking isn't insurance!

      • easternculture on 06/03/2015 - 21:57

        it was lost inside the Chullura parcel center (scanned in and never scanned out).

        Usually when the courier loads it in the Van, it is scanned out.

        So basically someone stole it inside the parcel center.

        I usually insure it so it doesn't get lost in transit. But missing inside parcel center is a bit weird

        • sleepyowl on 07/03/2015 - 16:33

          Same thing happened to me at the chullora one but with a much lower priced item!

        • JimmyF on 07/03/2015 - 21:18

          missing is missing…. doesn't matter where it does missing does it!?

          Thanks for the neg. But tracking isn't insurance. Tracking will tell you what you already know. Its lost!

        • easternculture on 07/03/2015 - 23:48

          @Level380:

          just means there is a thief somewhere

        • jackary on 08/03/2015 - 11:10

          @easternculture: no it doesn't

        • JimmyF on 09/03/2015 - 13:20

          @easternculture: well thats generally what there is when something goes missing! Report it and move on. But that doesn't mean you get your money back unless you had insurance.

          Once again, tracking isn't insurance.

      • fruit on 08/03/2015 - 20:58

        Isn't it AusPosts responsibility to deliver it?

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