Thank you Chair and Senators.
My name is Paul Graham and I am the Group Chief Executive Officer and Managing Director of Australia Post. Today I’m joined by Jane Anderson, Executive General Manager, Community, Sustainability and Stakeholder Engagement and Nick Macdonald our Group Corporate Secretary.
I would like to start by acknowledging the traditional custodians of the Canberra region, the Ngunawal and Ngamberi peoples and pay my respects to their elders past and present. I thank the Committee for the opportunity to provide this opening statement.
During the 2024 financial year Australia Post delivered 2.3 billion items, paid our Licensed Post Office partners $581.8 million and permanently changed our letter delivery model for the first time since we became a Government Business Enterprise back in 1989.
We continue to transform the business to better meet the rapidly changing needs of our customers and communities and support our long-term viability.
Despite reporting an $88.5 million loss in the past financial year, our Post26 strategy and modernisation reforms have set the business on a more sustainable financial pathway. We are making good progress.
The $111.8 million improvement on last year’s performance was largely due to our focus on simplifying the business, removing costs and strategically investing for future growth. We have continued to invest in regional Australia with new parcel facilities opened at Avalon, Ballarat and the Gold Coast and a number of other locations.
There is a growing gulf between our two-core businesses. The letters business is stuck in reverse, while our parcels business continues to achieve solid growth in a highly competitive environment.
Letter volumes have declined to their lowest point since the 1950s, this despite the Australian population growing three-fold during the same period. Our parcels business continues to grow solidly year-on-year, even as we face fierce competition from domestic and global competitors who have caused widespread disruption in other geographies and continue to invest billions of dollars locally.
Our Letters business lost $361.8 million in FY24, despite a $0.30 cent increase in stamp prices. Letters have now fallen to our third largest revenue category behind Parcels and StarTrack Express. Added to this, the cost of delivering letters which is part of our Community Service Obligations, increased to $447 million.
Our Letters business hasn’t made any money in years, and we don’t anticipate that it ever will. However, we will always provide this important service to the community.
Implementing the first phase of our modernisation reforms has been beneficial, including the roll out of our new delivery model that allows for letters to be delivered every second day. However, further reform will be needed to fully future-proof the business.
The business is also seeking to operate more sustainably. We already have Australia’s largest electric delivery fleet of 5,131 vehicles, including 175 new electric motorbikes to reduce our emissions profile even further. We have also increased our own solar generation by 55% in the past year.
Bank@Post remains a critical service that both metropolitan and regional banking customers access and value daily. According to recently published APRA data, the big four banks had a net reduction of 190 branches over the past financial year. And while Australian banks have had a net branch reduction of 41% since FY17, our Post Office network has had a net reduction of 4% during the same period. We expect Bank@Post will make a loss, and we are working with the banks to negotiate new agreements that reflect the changing circumstances, return a small margin to Australia Post and its licensees and meets community expectations of the banks.
We have allowed the banks to leave town with their reputations intact, but we cannot and should not subsidise this essential service to the benefit of the banks’ bottom line.
A viable and thriving Australia Post is more important than ever for the tens of thousands of people who work in our facilities and Post Offices, as well as the communities we support.
This includes the 71 not-for-profit community groups across the country that are receiving funding as part of our 2024 Community Grants program for projects to support mental wellbeing, childhood education and community inclusion.
We have also launched our first Refugee Action Plan to boost inclusion in our workforce and the wider community. Australia Post has team members from 143 nationalities working in the business, reflecting the diverse communities we operate within and support, and we are committed to even greater inclusion across the team.
The safety of our team members remains our highest priority. One of the biggest challenges our Posties and delivery drivers face comes in the form of our beloved pets. Over the past six months, we’ve reported 1,277 dog-related incidents – which equates to 10 people every day falling victim to a dog attack or threatening behaviour. This cannot continue and comes despite our many pleas for dog owners to take responsibility for their pets.
The commitment and dedication of our 64,000 strong team continues to be our greatest strength. Every year our people step up to the plate for our customers and last year was no exception. I would like to thank the team for their continuous efforts.
Of course, the calendar year is far from over and the next seven weeks leading into Christmas will be our busiest for our permanent team and the 3,000 casuals we need to successfully manage the traditional peak period.
In closing, Australia Post looks forward to delivering a better tomorrow, where we continue to make a valuable contribution to the lives of our customers and communities and I remain optimistic about the future of our business.
