Privitise Australia Post

Image by Gerard's World via Flickr

According to the Sunday Telegraph Australia Post's profits are declining and, unless it closes some offices, will soon be losing money:

The organisation, which only a few years ago boasted $500 million in profits saw its earnings drop to $100 million last year and letter volumes fell by 5.5 per cent.

"If we do not take action now to reform our business model, Australia Post will lose money in the next few years. This is not an option," the company said in a blunt warning in its annual report. The federal government is Australia Post's sole shareholder and has benefited from hefty dividends over the years.

But if the company cannot remain profitable it will require government funds to keep operating. Australia Post currently has $500 million in cash reserves to bolster its operations and has embarked on a restructure that will include spending $150 million on redundancies.

 

I can hear the complaints already, but it makes no sense to keep uneconomic outlets going. If Australia Posts ends up in the red it will need to be subsidised by the taxpayer or the consumer through higher postage charges.  The battlers of Blacktown will be subsidising the toffs of Woolahra

Here's a better suggestion, privatize Australia Post. It would then be able to raise private capital and reorganize itself into a modern organisation . They have the most extensive face to face public contact network in the country.  Theres no reason why they shouldn't be able to compete with government organisations like Centrelink, Medicare, RTA etc as well as additional private business.